Anticipate emerging risks of the new

global financial architecture

Contents

Introduction Financial stability and the A world of tensions and

global regulatory landscape sanctions 2024

Executive summary : Anticipating The global regulatory landscape The US issued additional sanctions against
emerging challenges of the New Global Key regulatory changes in 2023 Russia
Financial Architecture Basel 3, CRD & CRR: a stronger prudential Focus on the UK’s expanded Russia
Introduction : sustainable economy, framework sanctions Regime
financial stability and geopolitical Global Anti-Money Laundering efforts from Australia adopted further goods export
tensions the EU and the FATF sanctions
The EU Green New Deal Investment Plan Global coalition renews enforcement of
International Monetary Fund (IMF) and Russian-origin Oil price cap
Global Financial integrity efforts New EU sanctions
Are we still facIng a global manufacturing Czech Republic introduced unilateral
crisis and a supply chain crisis? sanctions against Russia
Monetary policy, and fighting inflation in the Japan announces sanctions and bans against
US and the EU Russia
RegTech trends in 2024
The future of payments according to the BIS:
CBDCs and Digital Wallet
Solvency 2, IRRD and DORA in 2024

Fighting Financial Crime in 2024 Global trends : more complex rules What to expect from leaders in 2024 ?

Key evolution trends : what to expect in North America & Canada at the forefront of From Compliance Officer to Team Leader in
2024? virtual assets regulations 2024
International Monetary Fund (IMF) strategy Post-Brexit UK and the EU facing the energy Build a successful Compliance Program as
on Money Laundering crisis, and Green Deal policies newly appointed CCO
FATF Recommendations updates Middle-eastern countries are facing Strategic relationships with regulatory
Monitoring alternative payment mechanisms unprecedented financial challenges (UAE & bodies in 2024
Artificial intelligence will enhance the fight Saudia Arabia) New European AML Authority
against financial criminality to another level Asia-Pacific, Australia and New Zeeland to AI, ML and data management for AML
AML risk detection fighting money laundering efforts transaction screening
5 AML reputational risk considerations for Integrating Diversity, Equity, and Inclusion
2024 into HR Talent Management
Compliance officer Leadership Program
2023-2024
Compliance Academy can help you stay on
top of regulatory challenges in 2024?
Anticipating emerging challenges of the New Global Financial
Architecture

Executive summary

New normal and organizational resilience Key takeaway

The banking industry in 2023 is marked by a dynamic regulatory Firms should review their business risk assessments to identify
landscape influenced by global standards, technological emerging threats. They should also update policies and processes
advancements, and a heightened focus on sustainability. Key to help prevent and detect financial crime in their organizations.
regulatory changes, such as the full implementation of Basel III,
advancements in anti-money laundering (AML) and
counter-terrorist financing (CTF) measures, and a growing
emphasis on cybersecurity, shape the industry's compliance
priorities.

Geopolitics of sanctions Key takeaway

The banking industry in 2023 is marked by a dynamic regulatory Firms should ensure that they have robust adverse media,
landscape influenced by global standards, technological sanctions screening and payment filtering systems in place in
advancements, and a heightened focus on sustainability. Key order to identify any changes made to sanctions lists as political
regulatory changes, such as the full implementation of Basel III, events impact the addition or removal of economic, trade and
advancements in anti-money laundering (AML) and financial sanctions
counter-terrorist financing (CTF) measures, and a growing
emphasis on cybersecurity, shape the industry's compliance
priorities.
Industry and regulatory trends Key takeaway
The banking industry in 2023 is marked by a dynamic regulatory Firms should ensure that they keep an eye on the extensive
landscape influenced by global standards, technological regulatory changes taking place. They should also make sure they
advancements, and a heightened focus on sustainability. Key can update their AML/CFT systems and controls to remain up to
regulatory changes, such as the full implementation of Basel III, date.
advancements in anti-money laundering (AML) and
counter-terrorist financing (CTF) measures, and a growing
emphasis on cybersecurity, shape the industry's compliance
priorities.

Know the trends and become a successful Key takeaway

leader inside your organization
Firms should continue to review their compliance tech stack,
exploring how new technologies can deliver against their
Looking ahead, the future of banking regulations is marked by
objectives, reduce data silos and help them to fully realize a
continuous evolution. Technology is expected to play a pivotal
risk-based approach. They should also assess the skills and
role, shaping regulations and fostering collaboration between
experience of their in-house team to explore if/where new
traditional banks and fintech startups. While challenges persist,
perspectives could add value.
proactive adaptation and a focus on navigating the evolving
regulatory landscape will position banking institutions for success
in the years to come.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Introduction

During the initial months of 2023, Compliance In comparison to 2023, survey participants
Vision conducted interviews with more than anticipate that their top priorities will shift, with
200 C-suite executives and senior compliance 62% focusing on cybersecurity, 57% on data
officers across Asia Pacific, North America, and protection, and 51% on financial criminality. The
year 2024 is not merely a period of adaptation;
Europe. This initiative took place before the instead, top-level executives must take decisive
official launch of our website, where measures to ensure compliance with the
prospective clients could access our services. evolving regulatory landscape. Cybersecurity
The participants represented a diverse range of has emerged as the foremost concern for senior
sectors, including financial institutions, private compliance officers and C-Level executives. Both
banking, fintech, insurance organizations, and local regulators and International Standards
the crypto ecosystem. Their responses yielded Setting Bodies (ISSBs) are resolute in
invaluable insights that have empowered us to establishing robust regulatory requirements
against cybercriminal activities, compelling
efficiently develop our leadership programs and organizations to allocate significant resources to
our compliance academy. These resources are address this issue.
meticulously crafted to offer exceptional
solutions, aiding your organization in achieving
compliance with regulatory requirements. Anticipate an increase in regulations and
heightened complexity in 2024, driven by the
The Geopolitics of Regulatory Compliance 2024 interplay of extraterritorial laws and the
emergence of new regulatory domains like
aims to provide leaders of financial institutions virtual asset providers (VASPs), crypto-based
with a comprehensive understanding of services, and various crypto assets.
emerging issues and priorities as we move from Furthermore, organizations will delve into the
the past year into 2024. Reflecting on 2023, a integration of Artificial Intelligence and
pivotal year marked by the on-going blockchain technologies within financial
geopolitical tensions in Ukraine and Israel, the frameworks. The landscape will also witness a
challenges posed by the Covid-19 pandemic growing emphasis on green finance, the
aftermath, evolving political landscapes, high potential adoption of Basel 3's Phase 5 and 6,
and the adaptation to a transformed workplace
inflation numbers and high interest rates in the characterized by elevated turnover rates.
US and Euro zone, shifting social expectations,
and growing threats to financial stability in
Europe. In the post-pandemic era, numerous
challenges confront us, but Compliance Vision is
here to assist you in turning these challenges
into opportunities. These challenges include
regulatory-driven financial market
fragmentation, the impact of sanctions and
embargoes on deglobalization, the prevalence
of cyber warfare, the ascent of central bank
digital currencies, and the escalating demand
for ethical behaviour.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Prominent challenges confronting international Export revenues represent a key source of

financial institutions encompass substantial foreign exchange. It has long been
risks to the global banking system, the acknowledged that export-oriented strategies
imperative to align with the demands and not only enhance allocative efficiency and
expand market size but also help overcome the
complexities of the twenty-first century, balance of payments constraints. The current
interconnected challenges like sovereign debt, global financial architecture took shape after
credit default swaps, and a prolonged economic the rejection of Keynes' proposal for a
recovery. There are significant shifts and symmetrical treatment of all trade imbalances
challenges in international financial integration at Bretton Woods. Keynes' International
post the global financial crisis, coupled with the Clearing Union plan aimed to prevent structural
necessity to adapt to a scenario of low growth, trade imbalances by penalizing both trade
low interest rates, and a continually evolving surpluses and deficits. Its dismissal created
structural obstacles for developing countries,
market and regulatory landscape. impacting their ability to rely on export earnings
for sustainable growth and giving rise to two
The international financial architecture (IFA) sets of structural problems.
comprises a framework of institutions, policies,
rules, and practices governing the global Building resilience and driving inclusive
financial system. Its primary objectives are to economic growth
foster international cooperation for global
monetary and financial stability, facilitate During 2023, natural disasters, including
earthquakes, floods, droughts, heatwaves,
international trade and investment, support the tropical storms, and hurricanes, resulted in a
mobilization of stable and long-term financing global economic loss estimated at USD 270
for economic development, address the climate billion. The United Nations anticipates that
crisis, and achieve the Sustainable Development humanitarian needs will escalate to USD 51.5
Goals. billion in 2024. Jan Kellett, leading the team at
the United Nations Development Programme's
Recurrent financial and debt crises, coupled Insurance and Risk Finance Facility (IRFF),
with a deficiency in required development and underscores ‘the significance of financial
climate finance, underscore the inadequacy of instruments such as insurance in mitigating
the current IFA framework in addressing financial shocks for nations that are highly
susceptible to disasters induced by climate
contemporary challenges. Many of these change’.
limitations are systemic. Two specific issues
have been evident from the outset. Firstly, the
structure of the IFA and its institutions is not
designed to provide the necessary financial
support for developing countries to realize their
growth and development aspiration. Secondly,
developing countries often contend with
substantial and enduring current account
deficits, subjecting them to a governance
hierarchy that necessitates more stringent
adjustments to macroeconomic imbalances
compared to advanced economies. This
situation contributes to the accumulation of
unsustainable external debt burdens.
A global approach
Access to foreign currencies serves two crucial
purposes. Firstly, it facilitates the financing of
international trade transactions. In instances of
sluggish export earnings growth or responses to
external shocks, economies lacking sufficient
foreign exchange are compelled to reduce
imports. Developing countries, in particular, are
susceptible to these situations. Secondly,
foreign exchange is vital for funding the
importation of capital goods essential for
industrialization and economic progress.
Global economy and financial instability
This section examines the impact of worldwide economic and financial volatility on
driving structural changes, reshaping regulatory frameworks in response to global
developments and events in 2022. These include the inflation and monetary challenges
in the Eurozone, various sanctions, societal shifts post-COVID-19, developments in the
healthcare sector, cyber and financial crimes, and supply chain disruptions amid global
shortages.

Global economic entities are navigating an increasingly intricate regulatory

environment, allocating substantial financial resources to prepare for the emergence of
artificial intelligence and algorithms, the advent of Central Bank Digital Currencies
(CBDCs), and managing in an environment of regulatory fluctuation.

The role of the Compliance Office is to provide regulatory guidance and tools to enable
global economic entities to effectively manage these organizational changes. Top legal
experts and management consultants collaborate closely to offer transformative
solutions to complex organizations, ensuring compliance with regulatory mandates.

The global regulatory landscape Regulatory framework

The global financial landscape is undergoing a The rapid pace of technological advancements
profound transformation, driven by has outpaced the development of regulatory
technological advancements, regulatory frameworks, leaving policymakers grappling to
changes, and shifting economic paradigms. The
emergence of a new financial architecture keep up. Establishing comprehensive and
brings with it a set of challenges that financial adaptable regulations is essential to ensure
institutions, policymakers, and businesses must consumer protection, prevent market abuse,
navigate to ensure stability, security, and and maintain financial stability. Striking the right
inclusivity. In this article, we will explore some balance between fostering innovation and
of the key challenges associated with the safeguarding against potential risks is an
evolving financial ecosystem. ongoing challenge for regulators worldwide.
Technological disruption Cybersecurity threats
The integration of technologies such as
blockchain, artificial intelligence, and machine With the increasing reliance on digital platforms
learning is reshaping traditional financial and interconnected systems, the financial sector
processes. While these innovations offer becomes a prime target for cybercriminals. The
increased efficiency, transparency, and security, threat landscape includes attacks on payment
they also pose challenges in terms of systems, data breaches, and ransomware
cybersecurity threats, data privacy, and attacks. Financial institutions must invest in
regulatory adaptation. Striking the right balance robust cybersecurity measures to protect
between innovation and risk management is sensitive information, maintain customer trust,
crucial to maintaining a robust financial system.
and uphold the integrity of the financial system.
The integration of data analytics, AI, and
automation significantly enhances the capacity The nonprofit Information Security Forum,
to identify legal and reputational risks, recognized as the foremost authority on cyber,
articulate them in a typically quantitative information security, and risk management,
manner, and offer actionable insights. Relying highlights in its annual Threat Horizon study an
solely on manual systems is not a viable choice increased potential for:
for most companies. This is largely due to the
surge in customer data, which serves as the Disruption — A heightened risk of deliberate
lifeblood of numerous industries and is being internet outages due to excessive reliance on
generated at unprecedented volumes.
According to a 2022 survey by Matillion and IDG delicate connectivity, capable of severely
Research, data professionals report a monthly impacting trade. There is also an increased
average growth of 63% in data volumes from threat of ransomware being employed to hijack
400 different sources within their organizations. the Internet of Things.
Effectively governing this data is a fundamental
requirement that often doesn't receive Distortion — The intentional dissemination of
adequate investment. misinformation, facilitated by bots and
automated sources, poses a risk to
compromising trust in the integrity of
information.
Deterioration — The rapid progression of While hybrid and remote work arrangements
intelligent technologies, coupled with offer numerous advantages, they also introduce
conflicting demands arising from evolving additional security threats. Common risks
national security and individual privacy associated with remote work include accessing
regulations, negatively affects organizations' sensitive data through insecure Wi-Fi networks,
control over their information. using personal devices for work, employing
weak passwords, and engaging in unencrypted
With projected cybercrime-related damages set file sharing.
to reach $10 trillion annually by 2025, let's
delve into a more detailed examination of the State-Sponsored Attacks
significant cybersecurity threats anticipated for
2024. In addition to hackers seeking financial gains
through the theft of individual and corporate
Cloud Vulnerabilities data, entire nation-states are employing their
cyber expertise to infiltrate other governments
Cloud storage offers numerous advantages, such and launch attacks on critical infrastructure.
as encrypted servers, limited access, and robust Cybercrime has evolved into a significant threat,
cybersecurity measures. Despite being generally not only for the private sector and individuals
more secure than traditional hard drive storage, but for the government and the nation as a
cloud storage is not without risks. The National whole. As we enter 2022, there is an
Security Agency has identified four primary anticipated increase in state-sponsored attacks,
cloud vulnerabilities: misconfiguration, poor with particular concern surrounding attacks on
access control, shared tenancy, and supply chain critical infrastructure.
vulnerabilities. Additionally, insecure APIs and
the absence of multi-factor authentication can While many of these attacks focus on
contribute to cloud security concerns. government-run systems and infrastructure,
private sector organizations are also vulnerable.
Data Breaches According to a report from Thomson Reuters
Labs:
Data breaches have unfortunately become
pervasive and show no signs of abating. Major "The emerging and significant risk of
companies, including Yahoo, LinkedIn, state-sponsored cyberattacks poses a growing
Facebook, and Marriott International, have challenge to private enterprises, especially
experienced significant breaches in the 21st those sectors that become convenient targets
century. In 2021, the United States witnessed for addressing geopolitical grievances."
the highest number of data breaches, affecting
212.4 million people, as reported by IoT Attacks
Comparitech. This marked an increase from
2020 when 174.4 million individuals were The Internet of Things (IoT) is expanding rapidly
affected. Iran followed the U.S. closely with (Statista.com predicts 75 billion connected
156.1 million people impacted by data breaches devices by 2025). This includes not only laptops
in 2021. and tablets but also routers, webcams,
household appliances, smartwatches, medical
Risky Hybrid or Remote Work Environments devices, manufacturing equipment,
automobiles, and even home security systems.
The concepts of hybrid and remote work gained
widespread popularity during the COVID-19 While connected devices offer convenience for
pandemic. According to Gallup, around half of consumers and cost-saving opportunities for
full-time U.S. workers (60 million people) companies by gathering extensive data and
believe that their current job can be performed streamlining business processes, the
remotely, at least part of the time. The shift proliferation of connected devices also
towards remote work increased from 8% of increases the risk. IoT networks become more
workers exclusively remote pre-pandemic to susceptible to cyber invasions and infections.
39% in 2022. Projections indicate a 24% remote Once under the control of hackers, IoT devices
work rate for 2023 and beyond. can be manipulated to cause chaos, overload
networks, or lock down essential equipment for
financial gain.
Climate change and ESG The International Sustainability Standards Board
(ISSB) formulated the IFRS Standards as the
On July 31, the European Commission approved global benchmark for reporting on sustainability
the European Sustainability Reporting Standards and climate change. Although not utilized in the
(ESRS), aiming to standardize the reporting of United States, IFRS finds application in 132
climate change and other ESG-related actions jurisdictions, including member states of the
for companies operating within the European European Union. With the availability of these
Union. These standards are scheduled to standards, the responsibility now rests with
become effective on January 1, 2024. individual jurisdictions to decide whether to
adopt the entire set or specific components.
Originating from the European Green Deal,
which mandated an evaluation of companies' The environmental ESRSs have been designed
sustainability performance, these standards to complement and integrate with the IFRS
were formulated by the European Financial Sustainability Disclosure Standards. However,
Reporting Advisory Group (EFRAG) to align with due to the ESRS's less comprehensive nature
the reporting obligations of the EU's Corporate compared to the IFRS, not all IFRS Standards will
Sustainability Reporting Directive and be applicable. This approach aligns with the
Sustainable Finance Disclosure Regulation. concept that model standards should
Although initially submitted to the commission encompass all possibilities, allowing individual
in November 2022, the draft standards jurisdictions the flexibility to choose the
underwent significant revisions by EFRAG, standards that best suit their needs.
incorporating feedback from stakeholders and
the commission. The final standards adopted by The social category comprises four standards:
the commission are less stringent and have ESRS S1 – Own Workforce, ESRS S2 – Workers in
reclassified certain aspects from mandatory to the Value Chain, ESRS S3 – Affected
voluntary. Communities, and ESRS S4 – Consumers and
End-Users. These standards collectively provide
Despite the title featuring the term a thorough perspective on the company's
"sustainability," the ESRS encompass a broader activities. Additionally, they underscore two
scope, incorporating environmental, social, and significant disparities in the treatment of ESG
governance reporting requirements. ESG, a between the European Union and the United
form of investing considering non-financial States.
factors, has driven the necessity for
standardized reporting in response to its Firstly, the European Union (EU) is legally
increasing prominence. categorized as a stakeholder jurisdiction. In
such jurisdictions, the board of directors and
The European Sustainability Reporting C-suite executives of a company possess greater
Standards (ESRS) consist of 12 standards flexibility in decision-making. They are not
categorized into four reporting groups: general, restricted to solely considering the interests of
environmental, social, and governance. The shareholders but can also weigh the impact of
general category addresses cross-cutting topics, decisions on employees, communities, and
such as format and timelines, relevant to other parties affected by the company's actions.
multiple categories. Specifically, two out of the In contrast, shareholder jurisdictions, like the
12 ESRS fall under the general reporting United States, prioritize the interests of
category. shareholders as the primary consideration. This
distinction holds true across all ESG categories.
Environmental aspects receive primary
attention, comprising five standards within the Firstly, the European Union (EU) is legally
European Sustainability Reporting Standards categorized as a stakeholder jurisdiction. In
(ESRS). These standards are designated as ESRS such jurisdictions, the board of directors and
E1 – Climate Change, ESRS E2 – Pollution, ESRS C-suite executives of a company possess greater
E3 – Water and Marine Resources, ESRS E4 – flexibility in decision-making. They are not
Biodiversity and Ecosystems, and ESRS E5 – restricted to solely considering the interests of
Resource Use and Circular Economy. The shareholders but can also weigh the impact of
commission has disclosed its collaboration with decisions on employees, communities, and
the International Sustainability Standards Board other parties affected by the company's actions.
in crafting these standards, aligning with the In contrast, shareholder jurisdictions, like the
development of the newly introduced United States, prioritize the interests of
International Financial Reporting Standards shareholders as the primary consideration. This
Foundation Sustainability Disclosure Standards. distinction holds true across all ESG categories.
Secondly, the meaning of "social" differs The Financial Stability Oversight Council (FSOC),
between the EU and the US. In the US, the comprising heads of various federal agencies,
social aspect of ESG has become particularly including the Treasury, SEC, Federal Reserve
contentious, especially regarding LGBTQ+ issues, Board, and the Office of the Comptroller of the
leading to controversies and conservative-led Currency (OCC), has urged financial regulators
boycotts, as seen in the noteworthy case of Bud to focus on capacity building, disclosure, data,
Light's Dylan Mulvaney decision. In the EU, the and assessment and mitigation of
social dimension is comparatively more climate-related risks. An interagency committee
subdued, emphasizing working conditions, has been established to facilitate information
hours, and equal pay. Although the EU sharing, develop common approaches and
incorporates social considerations into its ESG standards, and promote communication among
reporting standards, the forthcoming FSOC members.
sustainability reporting standards from the US
Securities and Exchange Commission exclusively In October 2021, the Department of Labor
concentrate on environmental reporting. (DOL), overseeing private-sector employee
benefit plans, proposed new rules finalized in
The governance category, the final one, November 2022, explicitly allowing Employee
encompasses only one standard and Retirement Income Security Act (ERISA)
concentrates on a company's ethical practices fiduciaries to consider ESG factors in investment
regarding corporate governance. In ESG, decisions and engage in proxy voting without
governance is sometimes overlooked as many the need for special justification.
standards are already governed by existing laws
and regulations. While efforts have been made Nasdaq introduced board diversity disclosure
to elevate its significance, environmental issues requirements for listed companies, although
continue to dominate attention. these rules are currently subject to pending
litigation.
It's worth noting that the ESRS will be applicable
to publicly traded and large privately held Significant SEC rule-making occurred in the past
companies initially, with the intention to extend year. In March 2022, proposed rules were
the reporting standards to small to released to enhance and standardize
medium-sized enterprises in the future. climate-related disclosures for investors. In
However, this timeline has been delayed as the May, proposed amendments aimed to ensure
focus remains on the initial set of standards. consistent, comparable, and reliable
Conversely, the forthcoming SEC standards in information concerning funds' and advisers'
the US will initially apply only to publicly traded incorporation of ESG factors. The Inflation
companies. ESG reporting for privately held Reduction Act, signed into law in August,
companies in the US will be addressed at the allocated tax incentives and spending to
state level, although no significant progress has expedite the energy transition.
been made in that direction.
At the state level, a dozen states have enacted
ESG US related regulations or are poised to enact requirements to enhance
board diversity. Some states, including
In the United States, the consideration of California, Connecticut, Illinois, New Jersey,
environmental, social, and governance (ESG) New York, Oregon, and Washington, have
factors has primarily been driven by voluntary utilized pension system regulation to promote
responses within the market. This contrasts with sustainable investment. Conversely, certain
the European Union (EU), which has states like Florida, Kentucky, Oklahoma,
implemented specific prudential and Tennessee, Texas, and West Virginia have
conduct-based directives regarding ESG, and the imposed new restrictions on doing business
United Kingdom, where the Financial Conduct with financial institutions and investment funds
Authority mandates climate-related disclosures employing ESG-oriented strategies, such as
for listed companies. However, over the past 18 those considering ESG factors in their
months, the regulatory landscape in the United investment process or limiting investments in
States has undergone significant changes, the oil, coal, and gas industries.
marked by a series of new ESG initiatives and
proposals led by the U.S. Securities and
Exchange Commission (SEC), the Biden
Administration, and new state-level regulations.
In February 2021, President Biden issued an
executive order directing the federal
government to actively assess, disclose, and
mitigate climate pollution and related risks
across all economic sectors. Subsequently, the
SEC announced a comprehensive approach to
addressing climate change and other ESG risks
and opportunities, establishing a Climate and
ESG Task Force in the Division of Enforcement
and intensifying enforcement efforts on
climate-related risks.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

European Sustainable Finance framework

6 courses
US UK & EU BFSI
1,250 U$D

The European Commission’s 2024 framework:

Delivering today and preparing for tomorrow Minimizing administrative burdens is essential
for preserving the competitiveness of European
In the upcoming June elections, over 400 million
businesses. That's why the Commission, in its
Europeans will participate in the continent's
long-term competitiveness Communication, has
largest democratic event. This includes
set a target to reduce the burdens associated
numerous young individuals, many of whom will
with reporting requirements by 25%, all while
be exercising their democratic rights for the first
upholding policy objectives. This involves
time, with 16- and 17-year-olds eligible to vote
rationalizing and streamlining requirements that
in five Member States. The outcomes of this
disproportionately affect businesses, including
election will shape Europe's trajectory for the
SMEs and micro-companies, as well as
next five years and beyond, a critical moment in
administrations, to ensure they serve their
the continent's history.
intended purpose.
Europe confronts several epoch-making
To achieve this objective, the Commission has
challenges and opportunities, spanning the
enacted legislation, including reforms to the
climate and biodiversity crises, the impact of
Union Customs Code, establishing a single EU
the digital revolution and artificial intelligence,
interface and facilitating data re-use. These
Russia's invasion of Ukraine leading to energy
measures are anticipated to result in
price and cost of living crises, migration issues,
approximately EUR 2 billion in cost savings.
and the imperative to ensure economic growth
Additionally, the proposed revision of the
and competitiveness.
Regulation on European statistics aims to
At the commencement of its mandate, this decrease the number of surveys and enhance
Commission outlined an ambitious agenda the use of automated and simplified processes,
aimed at fortifying a more robust and resilient yielding estimated cost savings of EUR 450
Union. Commitments were made to take bold million, including for SMEs.
action, striving to be the first climate-neutral
In this work program, the Commission is
continent, safeguarding Europe's natural
presenting further proposals for rationalization
environment, leading the way in a
to decrease administrative burdens without
human-centric and innovative digital transition,
compromising social, safety, consumer
fostering economic growth with a focus on
protection, environmental, or economic
social fairness, inclusion, and prosperity,
standards. These proposals will streamline
reinforcing responsible global leadership,
reporting requirements, consolidating
protecting citizens and values, and nurturing
overlapping obligations, reducing the number of
and strengthening democracy.
affected businesses, and promoting
However, since 2019, the world has undergone digitalization where applicable.
significant transformations. As a Union, we have
In order to provide stakeholders with sufficient
had to respond and adapt to unprecedented
time to acclimate to new regulations, we intend
challenges, maintaining unity in our responses
to defer the deadline for the adoption of
and steadfastly pursuing the realization of our
sector-specific European sustainability reporting
ambitions.
standards.
Global economy and financial instability

The Commission plans to modify the thresholds Regarding the industrial emissions portal
outlined in the accounting Directive, aiming to Regulation, the Commission is committed to
grant over a million companies relief through expediting digitalization and further
diminished reporting obligations. Additionally, a streamlining reporting requirements. In the
review of the benchmark Regulation is revision of the coordination of the social
underway, with considerations to exempt security framework, the Commission will
administrators of smaller benchmarks, continue to assist co-legislators in finding
constituting 90% of the population, all while effective and practical solutions that protect
maintaining a high level of consumer and workers and facilitate cross-border activities in
investor protection. Moreover, the Commission the internal market. Additionally, the digital
puts forth a proposal to streamline data sharing Europe program is available to fund Member
among authorities overseeing the financial States' initiatives, supporting simple technical
sector and mitigate redundant reporting. reporting means, such as a single-entry point for
reporting cybersecurity incidents within the
Under the second notice on taxonomy framework of the Directive on measures for a
reporting, which provides guidance on high common level of cybersecurity across the
interpreting disclosures related to taxonomy, we Union (NIS2 Directive).
will specify that undertakings are not required
to assess activities that are immaterial to their As highlighted in the State of the Union address,
business or lack evidence or data to the Commission has successfully fulfilled over
demonstrate compliance with the technical 90% of the commitments outlined in President
screening criteria of the EU Taxonomy. The von der Leyen's 2019 Political Guidelines.
elimination of certain disclosure obligations Looking ahead to 2024, it is imperative for
concerning alternative dispute resolution cases co-legislators to collaboratively focus on
and the replacement of the online dispute reaching an agreement on pending proposals,
resolution platform are anticipated to yield aiming to deliver advantages for both European
overall benefits of approximately EUR 630 citizens and businesses.
million per year for businesses.
Proposals will also address marketing standards
for fishery products, plant health, transport,
agriculture, and spatial infrastructure
monitoring. The Commission will collaborate
with co-legislators to maintain the simplicity of
reporting requirements while safeguarding the
objectives and purpose of the legislation. For
instance, in the proposed Directive on corporate
sustainability due diligence, the Commission will
advocate for the proportional application of
requirements, especially in areas like the role of
groups, with the aim of ensuring efficiency and
avoiding unnecessary burdens.
A European Green Deal The pending proposals on artificial intelligence
(AI) play a pivotal role in the safe and beneficial
Arising from the imperative to take decisive application of rapidly evolving AI technology.
action for the protection and preservation of The window of opportunity to guide this
our planet, the European Green Deal stands as technology responsibly is narrowing, prompting
our growth agenda, demonstrating to the global concerted efforts with international partners to
community that modernization and strengthen global AI governance.
decarbonization can progress hand in hand. The High-performance computers will be opened up
EU boasts the world's most ambitious green to AI start-ups to facilitate European innovation.
transformation plan, striving to achieve climate Existing satellite programs like Copernicus,
neutrality, foster a circular economy, and EGNOS, and Galileo already bring numerous
establish a net-zero economy by 2050. benefits and play a crucial role in addressing
Additionally, it aims to prevent environmental climate change. Additionally, IRIS2 will establish
degradation, conserve biodiversity, and create a critical infrastructure for secure connectivity,
pollution-free environment. particularly with significant defense
applications.
In response to Russia's aggression against
Ukraine, the Commission promptly acted to Significant investments in digital networks are
secure energy supply while reinforcing the required to meet our Digital Decade targets for
Union's commitment to the European Green 2030. Following recent exploratory
Deal and bolstering our industrial presence in consultations, groundwork will be laid for
clean technology sectors. Significant structural possible policy and regulatory actions regarding
changes have been proposed for the electricity digital networks and infrastructure. This
and gas markets, along with new initiatives to includes facilitating cross-border infrastructure
drive the development of green hydrogen operators in the Single Market, accelerating
markets. Our ongoing efforts center on ensuring technology deployment, and attracting more
the green transition unfolds equitably, capital into networks.
intelligently, and inclusively, leaving no one or
no place behind. We will actively engage with The space industry is gaining importance for
third-country partners to enhance green Earth observation, modern connected products
growth. and services, as well as defense and security.
The 2023 Space Strategy for Security and
To achieve this, the Commission will initiate a Defense aims to enhance the resilience of the
series of green dialogues to directly engage with EU's space infrastructure and capabilities in
citizens and conduct clean transition dialogues support of security and defense. In 2024, a
with industry and social partners. proposal for a European space law will be put
Simultaneously, preparatory work for the forth, establishing rules for space traffic
implementation of the future Social Climate management and ensuring the safety of critical
Fund is underway, complementing the Just space infrastructure. This will be complemented
Transition Fund to support vulnerable citizens, by a strategy on the space data economy to
businesses, and regions in the transition. enhance the utilization of space data across
Additionally, a strategic dialogue on the future economic sectors.
of agriculture in the EU will be launched,
fostering collaboration with farmers, A resilient EU economy that works for the
stakeholders in the food chain, and citizens to people
advance the transition towards sustainable food
systems. The EU economy has displayed resilience in the
face of unprecedented crises, addressing the
A European digital age socio-economic impacts of both the global
COVID-19 pandemic and Russia's war of
The Net-Zero Industry Act is set to assist aggression against Ukraine. Despite these
Europe's industry in the development and challenges, the EU must confront significant
adoption of innovative and strategic competitiveness issues, which will be addressed
technologies necessary for an economy with in the forthcoming report by Mario Draghi.
net-zero emissions. This includes technologies Through reforms aimed at securing the EU's
such as wind turbines, heat pumps, solar panels, long-term economic prosperity and
electrolysers, nuclear technologies, and CO2 competitiveness while upholding the European
storage. Given the growing demand both within Pillar of Social Rights, we have reinforced the
Europe and globally, proactive measures are EU's distinctive social market economy.
being taken to ensure that European supplies
can meet this increasing demand.
Progress on the Single Market Emergency
Instrument is crucial to preserving the free
movement of goods, services, and persons, as
well as ensuring the availability of vital goods
and services in the event of unforeseen
disruptions. The SME Relief Package,
encompassing revisions to the Late Payments
Directive and tax simplifications establishing a
head office taxation system, aims to further
support Europe's small and medium businesses,
which form the backbone of our economy.
Global economy and financial instability

It is crucial to achieve consensus on pending Team global

proposals to strengthen the single market, the
cornerstone of the EU's sustainable On the global stage, escalating tensions and
competitiveness. Progressing the Capital geopolitical disruptions persist. The
Markets Union by reaching agreements on indiscriminate and brutal terrorist attacks by
insolvency, clearing, simplifying companies' Hamas against Israel pose a direct threat to
access to public capital markets, enhancing peace and security in the region, emphasizing
insurance companies' long-term investment the urgent need to reinvigorate the Middle East
capacity, and taking additional steps toward a Peace Process. Additionally, Russia's war of
Banking Union, including the completion of the aggression against Ukraine, coupled with its
crisis management and deposit insurance actions in international forums, continues to
review, is essential. Additionally, reaching challenge the foundations of multilateralism
consensus on new rules for withholding tax and the rules-based international order.
procedures, preventing the misuse of shell
entities for tax purposes, and implementing The EU's military support to Ukraine has
measures to modernize the EU's Value-Added exposed critical gaps in the defense stockpiles of
Tax (VAT) system for enhanced resilience to Member States. In response, we have assisted
fraud through digitalization is imperative. Member States in reinforcing the European
defense industry through the Joint Procurement
Advancements are needed in the proposal to Instrument (EDIRPA) and a Task Force for Joint
improve business taxation (BEFIT and transfer Defense Procurement. Moreover, we have
pricing) and the comprehensive reform of the increased ammunition production capacity
EU Customs Union. In the realm of digital through the Act in Support of Ammunition
finance, progress is required on proposals Production (ASAP). The third Joint Declaration
enhancing rules for payment services, on EU-NATO cooperation has expanded
introducing a framework on financial data collaboration into new areas critical for security,
access ( "open finance"), and advancing including resilience, emerging and disruptive
negotiations on the proposal to establish the technologies, defense, and space.
legal framework for a digital Euro.
Efforts to strengthen and establish more
resilient connections with the world are ongoing
through our Global Gateway, applying the Team
Europe approach. This involves implementing
sectoral strategies and action plans, such as the
strategy on international energy engagement,
the Joint Communication on international ocean
governance, the space strategy for security and
defense, the update of the EU maritime security
strategy, the Joint Communication on a
partnership with the Gulf, and the new agenda
for Latin America and the Caribbean.
 What does it mean for your organization ?

Global economy and financial instability

Pandemic quarantines in China, and Assisting the board of your Supply chain turbulences in Western
Covid-19 crackdown measures have organization and providing helpful economies have multiple causes and
caused major supply chain turbulences legal and regulatory insights is key to must be targeted. The Supply chain
resulting in lower revenues overcome the challenges ahead and toolkit can help your organization by
build a resilience program providing accurate data to C-Level
How can we help your business ? executives

How can we help your business ? Leadership Programs 2023-2024

Compliance Officer Leadership Program 2023-2024

91 slides (Eng)
199 U$D

The European way of life The action plan on anti-drug trafficking and
organized crime, including the European Ports
In response to the COVID-19 pandemic, the Alliance, lays the groundwork for more cohesive
Commission initiated the groundwork for a joint efforts in combating organized crime and
European Health Union. This encompasses a illegal drug trafficking. The Commission will also
bolstered health security framework, including present a proposal to modernize the legal
the establishment of the new Health framework addressing the smuggling of
Emergency Preparedness and Response migrants, ensuring the availability of necessary
Authority. Additionally, it involves the legal and operational tools to counter new
groundbreaking Europe's Beating Cancer Plan modus operandi of smugglers. Furthermore, the
and proposals for creating the European Health Commission plans to host an international
Data Space and reforming pharmaceutical conference on fighting people smuggling,
legislation. The EU has also embraced a new emphasizing the importance of international
global health strategy to steer its endeavors in cooperation and a robust global alliance in this
enhancing healthcare on a global scale. domain.
The Commission remains committed to In the realm of higher education, the
supporting both the legislative and operational Commission will introduce a blueprint for a
aspects of managing migration. It is imperative future joint European degree, contributing to
that co-legislators finalize the New Pact on the realization of a European Education Area.
Migration and Asylum by the conclusion of this This initiative will be supported by
legislative mandate. Concurrently, it is crucial to recommendations on quality assurance in
persist in operational efforts to advance the higher education and measures to enhance the
EU's collective response to migration attractiveness of academic careers.
challenges, fostering cooperation with key
partners. A European democracy
The forthcoming proposals for the Cyber Throughout this term, the Commission has
Resilience Act and Cyber Solidarity Act will play prioritized the reinforcement and rejuvenation
a pivotal role in fortifying cybersecurity. These of our European democracy. The European
initiatives aim to enhance supply chain security Democracy Action Plan has served as a guiding
and promote solidarity at the Union level, framework, aiming to empower citizens and
facilitating improved detection, preparedness, fortify democracies across the EU. This involves
and response to cybersecurity threats and initiatives focused on promoting free and fair
incidents. elections, strengthening media freedom, and
countering disinformation. The Conference on
As highlighted in the sixth Progress Report on the Future of Europe represented an
the Security Union, consensus is vital on unprecedented exercise in participatory
proposals that not only bolster the security of democracy, providing a platform to hear the
our citizens but also effectively combat crime perspectives of citizens from all corners of the
while upholding shared fundamental values. EU regarding the Union's future.
This encompasses proposals on cyber
resilience, the Union Code governing the Introducing a new generation of citizen panels
movement of persons across borders, for three key initiatives in 2023, with plans for
automated data exchange for police additional panels in the upcoming year, has
cooperation (Prüm II), the collection and solidified citizens' participation as a concrete
transfer of advance passenger information, element in our policy-making toolbox. Special
anti-trafficking in human beings, combating attention has been given to engaging the
child sexual abuse, asset recovery and younger generation, recognizing their pivotal
confiscation, and the definition of criminal role in shaping the future, with one-third of the
offenses and penalties. panellists aged between 16 and 25.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

EU AML/CFT package 2023-2024

6 courses
US UK & EU BFSI
1,100 U$D

Global Anti-Money Laundering efforts Despite its direct supervision of a limited

number of financial entities, AMLA's primary
The new European Union Anti-Money impact is anticipated to be indirect, exerted
Laundering Authority (AMLA) through its influence on national authorities
(which will continue to lead supervision for the
In December 2023, EU legislators announced majority of EU financial institutions) and AMLA's
the achievement of a provisional agreement on authority to issue Implementing or Regulatory
legislation concerning the establishment of a Technical Standards. These standards are
new EU Anti-Money Laundering Authority directly binding, even on financial entities not
(AMLA) and certain components of the broader under direct supervision. AMLA's success will
money-laundering package. This milestone hinge on its rule-making and coordination
marked the conclusion of extensive 'trilogue' capabilities to standardize supervisory practices
negotiations involving the European and elevate standards across the EU.
Commission (EC), European Parliament (EP), and
EU governments (Council) regarding substantial This underscores two crucial priorities for the
reforms to EU regulations addressing new agency as it commences operations:
anti-money laundering and countering the
financing of terrorism (AML/CFT). Developing Technical Standards: The EU AML
coordination group has identified 80
The EC initially presented its AML Reform Implementing or Regulatory Technical Standards
Package in 2021, aiming to enhance the (ITS/RTS) needed to specify the details of the
detection of suspicious transactions and new single AML/CFT rulebook.
activities while closing loopholes exploited for
money laundering or financing terrorist Establishing Supervisory Policies and Processes:
operations through the financial system. The This includes the formation of Joint Supervisory
focal point of the package was the Team structures, defining modes of cooperation
establishment of the new EU AMLA, designed to with national AML authorities, and crafting
elevate AML supervision standards and Memoranda of Understanding for collaboration
coordinate efforts against illicit finance. with other EU and third-country agencies.
Following the trilogue agreement and in AMLA's initial policy initiatives are likely to be
anticipation of the AMLA’s location deal, the informed by a comprehensive survey of existing
legal texts for the AMLA Regulation and the AML rules and supervisory practices across
remaining components of the AML Package are Europe. Drawing on the experience of the
being prepared for formal approval by the European Central Bank (ECB) in establishing the
European Parliament (EP) and Council in the Single Supervisory Mechanism, several senior
early part of the upcoming year. AMLA is ECB staff members have already been seconded
expected to become operational in 2024, with to the EC's AMLA Task Force, laying the
the commencement of direct supervision of groundwork for the new authority.
'high-risk' institutions likely occurring in
2026/2027.
Global economy and financial instability

It is acknowledged that the commencement of FATF plenary – October 2023

AMLA supervision is still on the horizon, and
definitively identifying the 40 institutions During the period of October 25-27, 2023, the
subject to direct AMLA supervision remains fourth plenary session of the Financial Action
uncertain at this stage. Task Force (FATF) under the two-year Singapore
Presidency of T. Raja Kumar convened at the
Financial entities, including banks, should brace FATF headquarters in Paris. A concise overview
themselves for heightened AML regulatory of noteworthy developments during this session
standards and more rigorous supervision as the includes modifications to the grey list,
new EU AML regime takes effect. This pertains alterations in Indonesia's FATF membership
not only to entities potentially under direct status, enhancements in asset recovery
AMLA supervision but also, significantly, to the measures, initiatives to counter the exploitation
vast majority indirectly supervised yet directly of non-profit organizations (NPOs) for terrorist
affected by AMLA’s Implementing or Regulatory financing, considerations on crowdfunding in
Technical Standards (ITS/RTS). Prudent the context of terrorism financing, addressing
preparatory measures include conducting a illicit financial flows arising from cyber-enabled
comprehensive country-by-country analysis of fraud, examination of the misuse of citizenship
existing policies and practices in alignment with and residency through investment programs,
the new requirements. Establishing coherent and discussions pertaining to beneficial
and consolidated AML controls and governance ownership and transparency. Additionally, the
encompassing all EU business lines is essential. session encompassed a comprehensive review
of the joint mutual evaluation of Brazil.
While not assuming the role of an AML
supervisor, the ECB recognizes the pivotal Bulgaria's inclusion in the grey list comes in the
importance of effective collaboration between wake of notable instances involving the
prudential and AML supervisors for the success improper utilization of EU funds by Bulgarian
of both missions. The ECB acknowledges its role politicians, the imposition of Magnitsky
in combating illicit finance and has taken sanctions on corrupt Bulgarian officials by the
proactive steps in recent years. This includes Office of Foreign Assets Control (OFAC), and a
establishing a network for cooperation and substantial cryptocurrency pyramid scheme
information sharing with approximately 50 amounting to billions of dollars. Entities
European AML authorities, instituting an conducting business in Bulgaria may opt to
internal AML coordination function serving as undertake a comprehensive risk evaluation,
an in-house center of expertise and point of taking into account diverse factors such as:
contact on AML-related matters. Furthermore,
the ECB has updated its supervisory approach to -Negative media coverage pertaining to
money-laundering risks within its Supervisory politically exposed persons (PEPs).
Review and Evaluation Process (SREP),
contributing to SREP scores and consequently -The prevailing legal and regulatory landscape.
influencing Pillar 2 capital requirements.
Consequently, AML oversight will not be -Political stability considerations.
exclusively delegated to AMLA; it will continue -Levels of corruption within the jurisdiction.
to be an integral part of the ECB’s supervisory
scrutiny concerning banks' risk management -Economic conditions.
and governance.
-The prevalence of industries deemed high-risk.
Global economy and financial instability

The FATF engaged in discussions on various Improving Asset Recovery

strategic initiatives, addressing aspects such as
enhancing asset recovery and beneficial Aligned with Kumar's objectives outlined in the
ownership information to aid both public and June 2022 plenary, the FATF underscored its
private sector entities in identifying potential commitment to prioritize asset recovery as a
terrorist financing activities through countermeasure against money laundering and
crowdfunding. terrorist financing. Recognizing that globally,
only a fraction of assets generated by criminal
Beneficial Ownership and Transparency activities is recovered, the FATF has previously
led initiatives to fortify legal and operational
During the plenary, the FATF amended the frameworks for asset recovery, including the
methodology for upcoming mutual evaluations introduction of non-conviction-based
to guide assessment teams in determining the confiscation regimes. The revised standards
effective implementation of updated beneficial seek to instigate a cultural shift, making asset
ownership and transparency requirements. The recovery an integral aspect of crime prevention.
revised methodology will be published in The FATF will modify its assessment
November. Additionally, the FATF announced methodology to incorporate these
the development of updated risk-based recommendations, with the updated
guidance on beneficial ownership and Recommendations scheduled for publication in
transparency of legal arrangements. This November 2023.
guidance aims to help stakeholders assess and
mitigate money laundering and terrorist Crowdfunding for Terrorism Financing
financing risks. The revised guidance is slated
for public consultation, with finalization The FATF released a new report (published on
expected during the February 2024 session. October 31) examining how terrorists exploit
crowdfunding platforms. The report addresses
Misuse of Citizenship and Residency by challenges in detecting and preventing terrorist
Investment Programs financing within the crowdfunding ecosystem,
citing complexities in crowdfunding operations,
Cognizant of the risks of money laundering, the use of anonymizing techniques, and
fraud, and misuse associated with Citizenship industry-wide expertise gaps in identifying
and Residency by Investment (CBI/RBI) suspicious activities.
programs, the FATF, in partnership with the
Organisation for Economic Co-operation and The report suggests good practices, including:
Development (OECD), initiated a joint project.
This project explores how criminals exploit CBI -Incorporating crowdfunding into national
programs and proposes measures to manage terrorist financing risk assessments.
associated risks. The forthcoming report,
scheduled for publication in November, -Engaging with the crowdfunding sector.
underscores the significance of multi-layered
-Establishing effective domestic and
due diligence and clearly defines the roles and
international information-sharing mechanisms.
responsibilities of all parties involved in RBI/CBI
programs to detect fraudulent activities.
 What does it mean for your organization ?
Main provisions of the EU Green New Understanding the comprehensive The inability to understand and sort
Deal or US Sustainable Finance laws legal and regulatory framework related out the new legal and regulatory
and statues will push out most of to the EU Green New Deal or US and framework might result in a failure to
business organizations that don't UK laws might be challenging for any comply and in strong enforcement
comply with the greening 2030 Agenda organizations actions by supervisory bodies

How can we help your business ? Leadership Programs 2023-2024

Chief Sustainability Officer 2023-2024
91 slides
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The EU Green New Deal Investment Plan Practical support: The Commission will extend
support to public authorities and project
The European Union is dedicated to becoming promoters in the planning, designing, and
the world's first climate-neutral bloc by 2050. execution of sustainable projects.
Achieving this goal necessitates substantial
investment from the EU, national public sector, The Just Transition Mechanism (JTM) stands as a
and private sector. The Sustainable Europe pivotal tool to ensure that the shift towards a
Investment Plan, an integral part of the climate-neutral economy occurs equitably,
European Green Deal's Investment Plan leaving no one disadvantaged. While all regions
unveiled today, will mobilize public investment necessitate funding, with the European Green
and facilitate the leveraging of private funds Deal Investment Plan addressing this broader
through EU financial instruments, notably aspect, the Mechanism offers targeted support
InvestEU, resulting in a minimum of €1 trillion in to mobilize a minimum of €100 billion during
investments. the period 2021-2027 in the most affected
regions. This funding aims to alleviate the
While every Member State, region, and sector socio-economic impact of the transition,
will play a role in the transition, the magnitude particularly in regions heavily reliant on the
of the challenge varies. Certain regions will face fossil fuel value chain. The Mechanism is an
unique challenges, undergoing significant additional measure supplementing the
economic and social transformations. The Just substantial contribution of the EU's budget
Transition Mechanism aims to provide tailored through all instruments directly pertinent to the
financial and practical support to assist workers transition.
and catalyze essential investments in these
areas. Just Transition Fund: Receiving €7.5 billion of
fresh EU funds, this Fund will be complemented
The European Green Deal Investment Plan is set by Member States' contributions, aiming to
to activate EU funding and establish a conducive generate between €30 and €50 billion of
framework to facilitate and stimulate the funding. It will primarily provide grants to
requisite public and private investments for the regions, supporting skills development,
transition to a climate-neutral, green, economic opportunities, and investments in the
competitive, and inclusive economy. Aligned clean energy transition.
with other initiatives introduced under the
Green Deal, the Plan is structured around three Dedicated Just Transition Scheme under
primary dimensions: InvestEU: Seeking to mobilize up to €45 billion
of investments, this scheme will attract private
Financing: Mobilizing a minimum of €1 trillion in investments, especially in sustainable energy
sustainable investments over the next decade. A and transport, benefiting affected regions.
heightened proportion of EU budgetary
allocations for climate and environmental Public Sector Loan Facility: With the support of
initiatives will attract private funding, with a the EU budget, this facility, backed by the
significant role attributed to the European European Investment Bank, aims to mobilize
Investment Bank. between €25 and €30 billion for loans to the
public sector, facilitating investments in areas
Enabling: Providing incentives to unlock and like district heating networks and building
redirect public and private investment. The EU renovation.
will furnish tools for investors by centralizing
sustainable finance in the financial system. It The Just Transition Mechanism extends beyond
aims to facilitate sustainable investment by funding, incorporating the Just Transition
public authorities through encouragement of Platform to provide technical assistance to
green budgeting and procurement. The EU will Member States and investors. This holistic
also design streamlined procedures to approve approach ensures the active involvement of
State Aid for regions undergoing a just affected communities, local authorities, social
transition. partners, and non-governmental organizations
through a strong governance framework
centered on territorial just transition plans.
 What does it mean for your organization ?
Not taking in consideration the new
Global economy and financial instability
social expectations at the workplace
would result in a dramatic downfall in
New social expectations in the
post-Covid-19 "New normal" are
redefining right or wrong standards
Understanding new social expectations
are a must for C-Level executives in
order to succeed in the position and
productivity in your organization between colleagues and between drive productivity based on studies and
management and employees facts

How can we help your business ? Leadership Programs 2023-2024

Chief Compliance Officer 2023-2024
91 slides
US UK & EU BFSI
490 U$D
Eng.

International Monetary Fund (IMF) and Global Since the 2018 review, the coverage of financial
Financial integrity efforts integrity issues has expanded in all
workstreams. The IMF has improved its
Issues related to financial integrity,
encompassing money laundering, terrorist understanding of ML/TF risks and the
financing, and proliferation financing macroeconomic impact of financial crimes,
(ML/TF/PF), persist as a threat to the financial utilizing a wide range of quantitative and
sectors and broader economies of IMF qualitative data to guide engagements with
members. The consequences of financial crimes member countries. The review emphasizes the
extend to destabilizing inflows and outflows, increased incorporation of AML/CFT issues in
banking crises, and exerting pressure on surveillance and related conditionality within
correspondent banking relationships (CBRs), Fund-supported programs.
posing risks to financial stability and the
reputations of financial centers. These crimes
can lead to asset bubbles, impact tax revenue, Anti-Money Laundering and Combating the
stimulate the growth of the informal sector, and Financing of Terrorism (AML/CFT) assessments
undermine institutional roles. Addressing the within the Financial Sector Assessment Program
detrimental effects of financial crimes is crucial (FSAP), utilizing flexibility in scope and depth
for enhancing the prosperity of IMF members. while contributing to discussions on financial
The Fund, in its unique position, offers policy sector stability and soundness. This involvement
advice to member countries to mitigate risks ensures a comprehensive approach without
with macro-critical impacts. duplicating assessments against Financial Action
The IMF's Anti-Money Laundering and Task Force (FATF) standards. Increased regional,
Combating the Financing of Terrorism multi-country, and thematic Capacity
(AML/CFT) program, evolving over the past two Development (CD) projects have allowed for
decades, acknowledges the significance of more extensive support to diverse countries,
AML/CFT issues. In 2012, the coverage was offering flexibility for targeted and impactful
mainstreamed into the Fund's surveillance and engagements. Staff's participation in AML/CFT
lending operations. The importance of assessments has effectively supported FATF
addressing AML/CFT issues is underscored in Global Network’s efforts.
various Fund policies. This 2023 review assesses
the implementation of the Fund's AML/CFT
strategy adopted in 2018, identifies lessons Moving forward, the IMF aims to deepen the
learned, and seeks the Executive Board's integration of financial integrity issues into the
endorsement of proposed future steps. The Fund’s core functions, emphasizing AML/CFT
paper outlines the current approach to ML/TF issues with macroeconomic impacts. This
risks and provides an in-depth analysis of staff involves enhancing understanding of money
efforts across key Fund workstreams, such as laundering (ML), associated crimes, and
surveillance, financial sector assessment terrorist financing (TF) risks, particularly
programs (FSAPs), Fund-supported programs, focusing on macroeconomic aspects such as
AML/CFT assessments, and capacity
cross-border financial flows and the
development (CD). It also discusses the
integration of AML/CFT issues into other Fund repercussions of ML failures on financial
policies and staff contributions to the global stability. In surveillance, staff will emphasize
AML/CFT agenda through coordinated efforts linkages between financial integrity issues and
with stakeholders. The paper proposes the way fiscal, financial sector, and structural reforms,
forward for the Fund's AML/CFT strategy and while in FSAPs, the nexus between financial
presents issues for further discussion. integrity and financial stability will be a focal
point.
Global economy and financial instability

Are we still facing a global manufacturing crisis Geopolitical Instability: Rising geopolitical
and a supply chain crisis? instability poses a heightened threat to supply
chains, with Taiwan identified as the primary
A supply chain crisis refers to a disruption or conflict hotspot in 2024. Disruptions in the
breakdown in the sequence of processes and Taiwan Strait would impact approximately half
activities involved in producing and delivering of the world's container ships passing through
goods or services to consumers. This crisis can it.
manifest in various forms, impacting different
stages of the supply chain, and may result from Cybercrime: A carryover from the 2023 risk
a range of factors. Here are some common report, cyberattacks on supply chains rose
elements and causes associated with a supply sharply during 2023, with a 202%
chain crisis: year-over-year increase. Attacks on companies,
sub-tier suppliers, and logistics providers
1.Disruptions in the Flow of Goods reached the highest level in the last five years,
surpassing the previous record during the
2.Breakdowns in Communication and COVID-19 pandemic in 2020.
Information
Commodity Shortages: Anticipated to peak this
3.Inventory Shortages and Stockouts year, commodity shortages result from various
factors, including high input prices, concerns
4.Production Delays and Downtime
about farm profitability, increasing
5.Risk of Financial Loss protectionism, and extreme weather events.
Limited warning is expected for further
6.Global Factors and Dependencies disruptions, and top commodity-producing
countries may propose or expand protectionist
7.Technology and Cybersecurity Risks measures for commodity exports in response to
smaller harvests.
8.Regulatory Compliance Issues
Environmental Regulations: Supply chain
Addressing a supply chain crisis requires managers will encounter increased
effective risk management, contingency administrative burdens, operational costs,
planning, and collaboration across the entire research and development challenges, elevated
supply chain. Proactive measures, such as prices, and other disruptions as they adjust
diversifying suppliers, implementing robust production practices to meet compliance goals.
communication channels, and investing in
technology, can help mitigate the impact of Trade Wars between the US and China: The
potential crises. upcoming year will highlight a gap between
escalating trade war restrictions and shifting
2024 technology investments. Sourcing problems for
high-tech components, once available from
Wild weather events are anticipated to be the Chinese suppliers, are anticipated due to the
foremost disruptor for supply chains in 2024. three-year timeline for new semiconductor
Weather disturbances are already a significant plants to come online.
factor in logistics disruptions, and their impact is
expected to escalate during 2024.
Global economy and financial instability

Monetary policy, and fighting inflation in the However, a shift occurred by mid-2021,
US and the EU transitioning from a low inflation regime to one
characterized by high inflation (BIS, 2022).
Since mid-2021, numerous high-income Notably, inflation rates commenced their ascent
economies have witnessed headline inflation during the post-pandemic recovery, marked by
rates not observed in decades. Despite a significant disruptions in global supply chains.
gradual moderation in headline inflation, core The unjustified invasion of Ukraine by Russia
inflation has generally demonstrated greater further intensified price increases, with food
resilience than initially anticipated. and energy prices playing a pivotal role in
shaping inflation dynamics. These patterns are
The resurgence of inflation is particularly evident in both the euro area and the United
noteworthy as it follows an extended period of States, where both headline and core inflation
price stability known as the Great Moderation, experienced rapid acceleration. In response,
spanning from the mid-1980s to 2007. This was monetary authorities in both regions initiated a
succeeded by a decade of low inflation and largely synchronized cycle of interest rate
occasional deflation since the onset of the 2008 tightening, coupled with a reduction in their
Global Financial Crisis (GFC) and extending into substantial balance sheets. Despite these
2020. The crises originating in 2008 and 2020 similarities, the origins and trajectories of
fundamentally challenged the achievement of inflation dynamics in the euro area and the
price stability in high-income countries. While United States exhibit noteworthy differences,
inflation had been effectively controlled during presenting unique challenges for their
the Great Moderation period, the economic respective central banks.
crisis following the financial sector's collapse in
2008 and the global lockdowns implemented in The Federal Open Market Committee (FOMC),
2020 to curb the spread of COVID-19 unleashed responsible for policy decisions, opted once
recessionary and deflationary forces. again to maintain the existing short-term federal
funds target rate following its meetings
For example, a decade after the concluding on December 13, 2023. Of greater
commencement of the 2008 GFC, several significance to the financial markets, FOMC
countries, especially those grappling with members heightened expectations for potential
banking crises, continued to experience rate cuts in 2024. Federal Reserve (Fed) Chair
persistent output losses, and inflation had Jerome Powell affirmed the consideration of a
diminished across major economies, including shift in monetary policy, stating, "This (rate cuts)
the United States (US), the euro area, the will be a topic for us looking ahead." The
United Kingdom, and Japan (IMF, 2018). The FOMC's most recent rate adjustment took place
term "secular stagnation," denoting sluggish in July when it raised the fed funds rate to a
economic growth, low interest rates, and feeble range of 5.25% to 5.50%, marking the highest
inflation, gained prominence in policy circles fed funds target rate since 2001.
(Summers, 2014). The COVID-19 pandemic
exacerbated these ongoing trends, at least In the Eurozone, inflation is expected to
initially. The contraction in global output decrease, albeit at a more gradual rate
surpassed the severity of the one experienced compared to the recent trend. Diminishing cost
in the aftermath of the GFC of 2008. pressures and the influence of the ECB's
Consequently, by the end of 2020, inflation monetary policy are anticipated to contribute to
remained well below the target in all a decline in headline inflation, projecting a
high-income countries. decrease from 5.4% in 2023 to 2.7% in 2024 and
further to 2.1% in 2025, ultimately reaching
1.9% in 2026.
Global economy and financial instability

RegTech Trends in 2024 -Real-time Monitoring: Advanced analytics and

AI-driven solutions enable real-time monitoring
RegTech, short for Regulatory Technology, of transactions and activities, allowing for quick
presents both challenges and opportunities in detection and response to potential compliance
the financial and regulatory landscape. Here's issues.
an exploration of these aspects:
-Improved Accuracy: Automation reduces the
Challenges: likelihood of human errors in
compliance-related tasks. This enhanced
-Complex Regulatory Environment: Financial accuracy contributes to better regulatory
institutions operate in a highly regulated reporting and reduces the risk of
environment with evolving compliance non-compliance.
requirements. Keeping pace with the constantly
changing regulatory landscape poses a -Cost Savings: While initial implementation costs
significant challenge for RegTech developers and exist, RegTech can lead to long-term cost savings
users. by optimizing compliance processes, reducing
the need for extensive manual labor, and
-Integration with Legacy Systems: Many minimizing the risk of regulatory penalties.
financial institutions have legacy systems that
were not initially designed to accommodate -Scalability: RegTech solutions can be scalable,
modern RegTech solutions. Integrating new making them suitable for both large financial
technologies with existing infrastructure can be institutions and smaller entities. This scalability
complex and costly. allows organizations to adapt to changing
regulatory requirements without a
-Data Security and Privacy Concerns: As disproportionate increase in costs.
RegTech relies heavily on data, ensuring the
security and privacy of sensitive information is -Enhanced Risk Management: RegTech tools
paramount. Financial organizations need to often incorporate advanced risk management
address cybersecurity threats and adhere to capabilities, helping financial institutions
data protection regulations. proactively identify and mitigate risks associated
with compliance breaches.
-Global Standardization: Regulatory
requirements vary across jurisdictions. Global regulations for AI
Developing RegTech solutions that can cater to
diverse regulatory frameworks globally is a In the first quarter of 2024, a legal framework
challenge, requiring a nuanced understanding of for AI specific to fundamental rights and safety
regional nuances. risks related to AI systems will become effective.
-Initial Implementation Costs: Implementing The objectives of this legislation are as follows:
RegTech solutions can involve significant
upfront costs, particularly for smaller financial Ensure the safety of AI and its compliance with
institutions. This initial investment might be a fundamental rights and EU values.
barrier for some organizations.
Enhance legal clarity to stimulate investment
Opportunities: and innovation in AI.

Efficiency Gains: RegTech offers the potential for

automation and streamlining of regulatory
compliance processes. This can lead to
increased operational efficiency and reduced
manual efforts in meeting compliance
requirements.
Global economy and financial instability

Reinforce governance and enforcement of laws All these potential changes converge on the
governing fundamental rights and safety in AI. same conclusion: in 2024, it is imperative for us
as compliance professionals to familiarize
Facilitate the establishment of a unified market ourselves with AI and its compliance
for AI systems that comply with regulations, implications before it becomes an overwhelming
preventing market fragmentation. challenge.
Professionals responsible for compliance in the You might question why Cybersecurity is
EU, or those associated with organizations featured in a compliance trends report for 2024,
operating within the EU, should initiate considering it's not a novel concept. However, it
preparations now, particularly in the realms of remains a crucial focal point for the upcoming
risk management and aligning with regulatory year.
requirements, given the transition period's
conclusion in 2025. In Accenture’s Compliance Risk Study, sectors
such as banking, health and public services,
In the United States and the United Kingdom, insurance, as well as software and platform
the situation is not as straightforward. respondents, highlighted cybersecurity as one of
Nonetheless, changes are on the horizon. In their top two compliance challenges.
October 2023, President Biden issued the US
Executive Order on Safe, Secure, and Given that remote and hybrid working has
Trustworthy Artificial Intelligence. become the standard for most organizations,
employees and vendors now access systems
The Executive Order delineates responsibilities globally. Unfortunately, not everyone takes the
related to overseeing the development of AI necessary precautions to prevent potential
systems, enhancing privacy and data protection, cyber threats.
preventing bias and discrimination, ensuring
consumer and worker protection, fostering The situation is not improving either. Recent
innovation, promoting international research by the Cybersecurity Software
collaboration, and establishing guidelines for AI company Check Point reveals a 38% increase in
applications in government. global cyberattacks in 2022.
Staying abreast of these standards and Furthermore, dealing with cybersecurity can be
regulations is essential for compliance a costly affair. According to IBM’s Cost of a Data
professionals to ensure alignment with the new Breach 2023 Report, data breaches now cost
federal requirements, pending approval by businesses an average of $4.45 million, marking
Congress. a 15% increase over the past three years.
Likewise, in November 2023, British Prime
Minister Rishi Sunak introduced the AI Safety
Institute. According to the government's press
release, its mission is to minimize unforeseen
and rapid advances in AI, both in the UK and
globally. The institute will achieve this by
developing the necessary sociotechnical
infrastructure to comprehend the risks
associated with advanced AI and facilitate its
governance.
In essence, these developments will also impact
compliance professionals.
Global economy and financial instability

The future of payments according to the BIS: Cross-border payments with CBDCs can be
CBDCs and Digital Wallet envisioned in two fundamentally different
scenarios. The first scenario assumes the
The G20 has prioritized the improvement of availability of a retail CBDC from a specific
cross-border payments and has endorsed a jurisdiction to anyone inside and outside that
comprehensive program to tackle the key jurisdiction, with limited to no coordination
challenges. Achieving faster, cheaper, more between issuing central banks. In this case, if
transparent, and inclusive cross-border the design allows for anonymous payments
payment services would have broad-reaching similar to cash, it would, by default, be
benefits for citizens and economies globally, accessible to foreign residents. However, in
supporting economic growth, international practice, relatively few central banks are
trade, global development, and financial considering fully anonymous systems. In
inclusion. This report assesses the international contrast to cash, various restrictions on
dimension of central bank digital currency cross-border use could be imposed through the
(CBDC) projects and their potential utility for technological and regulatory design of the
cross-border payments. Additionally, it explores CBDC. This first scenario is contingent on the
potential macro-financial implications linked to domestic design of a CBDC.
the cross-border use of CBDCs. It is important to
note that the analysis does not imply that the Central Bank Digital Currencies (CBDCs) have the
central banks mentioned in this report have potential to improve the efficiency of
made a decision regarding the issuance of a cross-border payments, provided their design
CBDC. adheres to the "Hippocratic Oath for CBDC
design," emphasizing the principle of "do no
As of now, no major jurisdiction has launched a harm," as emphasized by the Group of central
CBDC, and numerous design and policy banks (2020). Coordinating national CBDC
decisions remain unresolved. Most CBDC designs could result in more streamlined
investigations by central banks primarily focus cross-currency and cross-border payments. The
on domestic issues and use cases. Given this introduction of cross-border CBDCs could offer
early stage, the considerations in this report are an opportunity to address inherent frictions in
exploratory and examine the cross-border current cross-border payment systems and
implications of CBDCs under the assumption of arrangements from the outset, presenting a
widespread use. In practice, the domestic chance for a fresh start. Improvements may
issuance of CBDC will undergo extensive include providing secure settlement, reducing
economic and practical examination before costly and lengthy intermediation chains in the
exploring cross-border use more extensively. payment process, and overcoming operational
Moreover, improvements in other aspects of the hour mismatches by offering accessibility 24/7.
cross-border payments program, such as
aligning regulatory frameworks, Anti-Money There is a need to delve further into the analysis
Laundering/Combating the Financing of of CBDC designs, particularly concerning access
Terrorism (AML/CFT) consistency, Payment options and the interconnection of CBDCs,
versus Payment (PvP) adoption, and payment including interoperability with non-CBDC
system access, will be crucial for the payment infrastructures and arrangements.
cross-border use of CBDC. Against this Ongoing efforts in this workstream will continue
backdrop, the report identifies various to explore these questions, employing both
questions that need consideration for CBDCs to practical and theoretical perspectives and
contribute to enhancing cross-border payments. leveraging analytical synergies from other
These questions are approached from both a components of the cross-border program, such
practical perspective, focusing on how a as the examination of global stablecoin
cross-border payment infrastructure with CBDCs arrangements and the feasibility of new
could be established, and a macro-financial multilateral platforms for cross-border
perspective, examining potential increases in payments.
cross-border flows, associated financial stability
risks, currency substitution, and reserve
currency configurations and backstops.
In the first quarter of 2021, a survey involving The Bank for International Settlements (BIS) has
50 central banks delved into their initial revealed that a substantial majority of central
considerations regarding the cross-border use of banks are actively exploring the potential
Central Bank Digital Currencies (CBDCs). The introduction of central bank digital currencies
survey encompassed responses from 18 (CBDCs). In a survey conducted by BIS involving
advanced economies (AEs) and 32 emerging 86 central banks in late 2022, over half reported
market and developing economies (EMDEs). conducting "concrete experiments" or trials,
Questions focused on the potential roles of while a staggering 93% confirmed their
CBDCs in cross-border payments, the utilization involvement in some form of CBDC-related
of retail CBDCs in currency areas beyond the work. The recent volatility in the cryptocurrency
issuing country, interoperability features, and market does not appear to have diminished
specific cross-border risks. Survey findings central banks' confidence in CBDCs, with nearly
indicate that a significant number of central 60% stating that the emergence of crypto assets
banks have yet to firmly decide on these issues, and stablecoins has accelerated their CBDC
as evidenced by a notable proportion of efforts. CBDCs are digital currencies directly
"undecided" responses. Among central banks linked to a country's central bank, designed for
expressing a viewpoint, there is a general both retail and wholesale use. Predictions from
openness to non-residents using CBDCs within Juniper Research suggest that the value of
the issuing jurisdiction, but a somewhat more CBDCs could reach $213 billion annually by
cautious approach toward allowing use abroad. 2030. Despite the excitement around CBDCs,
More than 25% of central banks are concerns persist about their use, including
contemplating permitting retail CBDC use by potential control of consumer spending and
non-residents, while nearly 20% are not privacy issues due to the programmable nature
currently considering this but may do so in the of these digital currencies. The BIS survey also
future. Conversely, only 8% of responding found that 87% of central banks engaged in
central banks are initially considering the use of CBDC work are considering involving private
domestically issued retail CBDCs in other intermediaries in the process.
jurisdictions, with about a third considering
such a possibility in the future. Notably, at least
a third of responding central banks may
reconsider their cross-border restrictions if a
foreign CBDC sees widespread use in their
jurisdiction, portraying a balanced perspective
between AEs and EMDEs (source: BIS).
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

Solvency 2
6 courses
US UK & EU BFSI
1,350 U$D

Solvency 2 in 2024 Consumer Protection: Improved protection for

insurance policyholders is emphasized,
The Council and the Parliament have reached a especially for cross-border insurance purchases,
provisional agreement on revisions to the through enhanced cooperation between
Solvency II directive, the primary EU legislation supervisory authorities.
governing the insurance sector, and new
regulations concerning insurance recovery and European Insurance and Occupational Pensions
resolution (IRRD). Authority (EIOPA)
The updated Solvency II rules aim to enhance New Tasks: The provisional agreement assigns
the role of the insurance and reinsurance sector new tasks to EIOPA, involving the elaboration of
in providing long-term investments to European technical standards to ensure a precise and
businesses, promoting financial resilience, and harmonized implementation of the Directive
better safeguarding policyholders against future across Member States.
challenges. The revised rules are expected to
contribute to the Capital Markets Union, Delegated Acts: The new rules will be
support green and digital transitions, and aid complemented by delegated acts to ensure a
Europe's economic recovery from the COVID-19 balanced review of the Solvency II prudential
pandemic. framework concerning capital requirements.

The Insurance Recovery and Resolution Insurance Recovery and Resolution (IRRD)
Directive (IRRD) seeks to enhance preparedness
for significant financial distress among insurers Orderly Resolution: The agreement introduces a
and relevant authorities in the EU. The objective harmonized European regime for resolving
is to facilitate early and effective intervention insurers in an orderly manner, empowering
during a crisis, ensuring the protection of national authorities with preventive
policyholders while minimizing economic and intervention powers.
financial system impacts and avoiding recourse
National Resolution Authorities: Member states
to taxpayers' funds.
will establish national insurance resolution
Solvency II authorities, ensuring effective cross-border
cooperation and granting EIOPA a coordinating
Encouraging Investment: The provisional role.
agreement incentivizes insurers to invest in
long-term capital, particularly supporting Pre-emptive Recovery Plans: (Re)insurance
initiatives like the Green Deal. companies and groups must submit
pre-emptive recovery plans to national
Enhanced Resilience and Stability: The supervisory authorities, applicable to entities
agreement improves long-term guarantee representing at least 60% of the respective
measures, making them more risk-sensitive, and market.
introduces a new macroprudential dimension.
Sustainability considerations are emphasized. Resolution Plans: Resolution authorities will
formulate resolution plans for entities
Simplified Rules: The agreement introduces representing at least 40% of their market, with
simplified and proportionate rules to enhance exemptions for small and non-complex
flexibility and reduce administrative burdens, undertakings.
particularly benefiting small and non-complex
insurance companies.
Resolution Tools and Procedures: The While the existing framework has generally
agreement provides resolution authorities with functioned well since its implementation in
tools and procedures to address failures, 2016, the Commission identified areas for
especially in cross-border scenarios, with improvement during a review of Solvency II.
specific conditions on their use. The disorderly failure of insurers can
significantly impact policyholders, beneficiaries,
Exclusions and Safeguards: Certain liabilities are injured parties, or affected businesses, leading
excluded from write-downs and conversions to to potential financial instability and requiring
protect policyholders. Provisions on financing exceptional recourse to public funds.
arrangements and a review clause for Insurance
Guarantee Schemes are included. To address these concerns, the Commission
proposed amendments to the Solvency II
Proportionality: The agreement ensures that the directive and introduced the Insurance
framework is proportionate and tailored to the Recovery and Resolution Directive (IRRD) on
insurance sector. September 22, 2021, as part of a
comprehensive review package. Unlike banking
Next Steps regulations, the IRRD does not mandate
minimum requirements for the insurance sector
The texts of the provisional agreements will
to maintain own funds or eligible liabilities for
undergo finalization and presentation to
absorbing potential losses, nor does it propose
member states' representatives and the
a pan-European single resolution fund financed
European Parliament for approval. If approved,
by the sector.
formal adoption by the Council and the
Parliament will follow. EIOPA has outlined its key strategic priorities
for 2024, which include
Reminder
Incorporating sustainable finance
Solvency II, established in 2009, lays down
considerations across all aspects of its work,
requirements for insurance and reinsurance
involving the integration of Environmental,
companies in the EU to ensure the adequate
Social, and Governance (ESG) risks into
protection of policyholders and beneficiaries. It
prudential frameworks for insurers and pension
employs a risk-based approach, assessing the
funds, and addressing protection gaps.
overall solvency of undertakings through
quantitative and qualitative measures. Supporting consumers, the market, and the
supervisory community through digital
The regulatory framework of Solvency II is
transformation. This involves defining policies
structured into three pillars:
and implementing initiatives such as Digital
Pillar I: Establishes quantitative requirements, Operational Resilience (DORA), the Artificial
covering the valuation of assets and liabilities, Intelligence Act, and the European Single Access
as well as capital requirements. Point (ESAP).

Pillar II: Sets qualitative requirements, Improving the quality and effectiveness of
encompassing governance, risk management, supervision, particularly in response to the
and the Own Risk and Solvency Assessment growth of cross-border business. This includes
(ORSA). revising supervisory convergence materials,
with a focus on the ongoing Solvency II review.
Pillar III: Focuses on supervisory reporting and
public disclosure. Ensuring technically sound prudential and
conduct of business policies, with a specific
These three pillars enable a coherent emphasis on maintaining the integrity of the
understanding and management of risks across insurance regulatory framework as the Solvency
the insurance sector. Key features of the II review progresses.
framework include:
Identifying, assessing, monitoring, and
Market consistency: Assets and liabilities are reporting on risks to financial stability and
valued based on market exchange, transfer, or conduct of business. This involves promoting
settlement. preventative policies and mitigating actions,
along with providing timely and accurate
Risk-based: Higher risks result in higher capital financial stability analyses and risk assessments.
requirements to cover unexpected losses.
Effectively recruiting, managing, and developing
Proportionate: Regulatory requirements are EIOPA's human capital to strengthen its position
applied in proportion to the nature, scale, and as an attractive employer.
complexity of risks in the insurance and
reinsurance business.
Group supervision: Supervisors enhance
coordination and information exchange to
improve cross-border supervision of insurance
and reinsurance groups.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

EU Banking package – Basel 3

9 courses
US UK & EU BFSI
1,850 U$D

Basel 3, CRD & CRR: a stronger prudential This proposal encompasses additional
framework modifications, primarily associated with
alterations in the credit, market, and
The Basel framework, established by the Basel operational risk capital framework. Formulated
Committee on Banking Supervision (BCBS), is a by the European Commission, the proposal
globally accepted set of measures. Basel III received technical support from the EBA.
standards, constituting minimum requirements,
are applicable to internationally active banks, Credit risk
ensuring consistent financial regulation on a
global scale. The EBA, as an observer at the The Basel III accord will bring substantial
Basel Committee, actively contributes to its modifications to the credit risk domain,
efforts aimed at enhancing the regulation, involving enhancements to the standardized
supervision, and risk management within the approach and a reduction in the options for IRB
banking sector. modeling. The EBA is expected to receive the
highest number of mandates related to the
In the European Union, the implementation of credit risk sector. Overall, these mandates will
the Basel framework primarily occurs through address crucial clarifications essential for
the Capital Requirements Regulation (CRR) and implementing the new standardized approach
Capital Requirements Directive (CRD). The EBA, and making adjustments to the IRB framework.
empowered by the CRR and CRD, plays a crucial
role in implementing various technical elements Market risk
related to liquidity, own funds instruments,
internal models, and reporting/disclosure The modifications incorporated in the preceding
requirements. CRR 2, specifically CRR 2, have already
integrated the primary components of the Basel
While the original Basel framework dates back III market risk framework into EU legislation.
to 1988, the most recent iteration, known as the The EBA has played a crucial role in developing
'Basel III framework,' was formulated in numerous technical standards and guidelines,
response to the Global Financial Crisis of offering essential specifications for institutions
2007/2008. Concluded by the Basel Committee to adopt the FRTB approaches in calculating
in 2017, Basel III addresses the identified own funds requirements for market risk.
weaknesses in the financial sector, aiming to Additional mandates in CRR task the EBA with
position banks better to absorb economic finalizing the implementation of the FRTB
shocks while sustaining their support for framework. Furthermore, CRR now includes
economic activity and growth. mandates to elaborate on certain aspects of the
revised framework for capitalizing on CVA risk.
The EU is dedicated to incorporating the Basel III However, in the realm of counterparty credit
framework within its jurisdiction and has risk, CRR introduces only minor adjustments.
diligently assessed the impact on EU banks. The
implementation has occurred through various Operational risk
phases, initiating with the adoption of the initial
components of the Basel III framework via the CRR introduces a fresh standardized approach
"CRD IV" package on 17 July 2013. for operational risk, removing the option to
Subsequently, new liquidity requirements, employ an advanced measurement approach.
specifically the liquidity coverage ratio (LCR) and The mandates from the EBA encompass the
the net stable funding ratio (NSFR), were essential aspects required for calculating capital
integrated into EU legislation. In more recent requirements, focusing on the business
developments, a new legislative proposal for indicator, the creation and upkeep of the
CRR/CRD was introduced in 2021, commonly operational risk loss database, and the
referred to as the "Banking Package." stipulations concerning the governance and risk
management framework for operational risk.
In the realm of reporting and disclosure, CRR Additionally, members of the management
persists in advocating for efficient, integrated, body are required to possess adequate
and proportionate frameworks that remain expertise and knowledge in the realm of ESG
meaningful for supervisors and other users. risks.
Throughout the development of the
reporting/disclosure framework, the EBA will ESG
continue efforts to align reporting and
disclosure requirements and ensure consistency The banking package brings forth various
with relevant international standards. provisions designed to expedite the
Additionally, when formulating the incorporation of ESG risks across all three
reporting/disclosure mandates, the EBA will pillars. Aligned with the goal of attaining
conduct a cost-benefit analysis of the climate neutrality in the EU and fortifying
requirements, as mandated by the CRR. institutions against financial risks emerging
from the transition process, these provisions
Moreover, as part of the banking package, the encompass fresh definitions for ESG risks and
EBA is tasked with publishing and centralizing terms like fossil fuel entities. They also entail
prudential disclosures on its website for all heightened risk management prerequisites for
institutions, as required in the CRR. The EBA institutions and augmented supervisory
Pillar 3 Data Hub is considered a crucial step in authority for competent authorities. The
facilitating easy access to Pillar 3 information for package assigns multiple mandates to the EBA,
interested users, enhancing market discipline. encompassing areas such as supervisory
This remains one of the EBA's highest-priority reporting, disclosures, stress testing, and the
mandates. prudential treatment of exposures.

In the implementation of changes driven by Silicon Valley bank

CRR/CRD under Phase 1, the EBA will follow a
two-step process. The first step involves Silicon Valley Bank is an American bank
immediate consultation on elements of the specializing in financing start-ups in the new
reporting/disclosure mandates requiring technology sector. At the beginning of March, it
prompt implementation by institutions and was the 16th largest bank in the United States
supervisors, enabling swift implementation in terms of assets under management. Silicon
soon after the entry into force of the banking Valley Bank closed its doors on Friday, March
package in the EU. In the second step, still 10, the largest bank failure in the United States
within the 12-month deadlines outlined in the since the collapse of Lehman Brothers in
level 1 text, the EBA will consult on other September 2008, which precipitated the
reporting and disclosure requirements, with a subprime crisis. This double announcement
focus on those not directly linked to Basel III triggered a bank run (or banking panic): many
implementation. customers, having lost confidence in the bank,
withdrew their funds... or tried to do so! The
Governance American authorities proceeded to close the
Silicon Valley Bank on Friday, March 10 to limit
In the governance domain, the new banking the haemorrhage.
package introduces significant changes aimed at
enhancing sound governance practices at the Any failure of a financial institution raises the
top managerial echelons of institutions, question of regulation. After the 2008 financial
particularly concerning ESG risks. Notably, the crisis, stricter regulations were put in place,
fit-and-proper requirements have been both in the United States and in Europe. Some
bolstered to promote greater harmonization of these rules have, however, been relaxed by
and supervisory convergence within the EU. This the Trump administration. Only banking
entails the introduction of key function holders institutions with a balance sheet of more than
(KFHs) and their fitness and propriety $250 billion are subject to strict oversight. The
assessment, the implementation of ex-ante threshold was $50 billion before 2017. With the
assessments for members of the management rules previously in place, the U.S. regulator
body (MB) conducted by the institution, a likely could have intervened early and thus
pre-appointment notification in cases subject to prevented the failure of Silicon Valley Bank,
ex-post assessment, and the consideration of which had a balance sheet size of $212 billion at
ML-FT risk during fit-and-proper evaluations of the end of 2022. Recent reporting has indicated
MB members. that, more than a year ago, the San Francisco
Fed did notice problems—including how the
Despite the collective responsibility of the bank managed its exposure to changes in
management body as a collegial entity, the interest rates and whether it would have
package underscores the accountability of enough cash in a crisis—and warned S.V.B.
individual management body members. It about them. (Between 2017 and the time of
mandates the mapping of duties for each those warnings, the bank’s assets had
member and requires the preparation of an quadrupled to more than two hundred billion
individual statement. The governance provisions dollars.) After the financial crisis of 2008,
now explicitly address ESG risk factors, Congress passed the Dodd-Frank Act, which
necessitating banks to establish processes for imposed stricter regulations on the banking
identifying, managing, monitoring, and sector; in 2018, Congress scaled back
reporting ESG risks they face or may encounter. Dodd-Frank, raising the threshold for increased
scrutiny of banks from fifty billion in assets to
two hundred and fifty billion.
A world of tensions and sanctions 2024
In 2023, the landscape of economic sanctions against Russia remains complex and
significant, as the international community continues to respond to various geopolitical
issues, including the ongoing situation in Ukraine. These sanctions, initiated by a
coalition of Western nations, primarily the United States and European Union
members, have targeted key sectors of the Russian economy, including finance, energy,
and defence. The objective has been to exert pressure on the Russian government by
isolating it economically and diplomatically. The impact of these sanctions on the
Russian economy in 2023 has been substantial, contributing to a significant contraction
in economic activity. The restrictions have hindered Russia's ability to access
international markets, leading to a decrease in foreign investments and a notable drop
in the value of the Russian Ruble.

Internationally, the sanctions against Russia have had broader implications for global
politics and economics. They have prompted discussions about the effectiveness and
morality of sanctions as a tool of foreign policy, particularly regarding their impact on
ordinary citizens.

The US issued additional sanctions against The sanctions for non-compliance include
Russia restrictions on U.S. correspondent or
payable-through accounts and possible
On December 22, 2023, the Biden inclusion on the Specially Designated Nationals
Administration issued an Executive Order (EO) and Blocked Persons List (SDN List). OFAC also
titled “Taking Additional Steps with Respect to issued FAQs clarifying activities that might
the Russian Federation’s Harmful Activities.” trigger these sanctions and guidance for U.S.
This EO amends two previous orders: EO 14024 financial institutions on account closures for
from April 15, 2021, titled “Blocking Property sanctioned foreign financial institutions.
With Respect to Specified Harmful Foreign Additionally, the EO expands the import ban on
Activities of the Government of the Russian certain Russian products and sets forth
Federation,” and EO 14068 from March 11, requirements for the Secretary of Homeland
2022, titled “Prohibiting Certain Imports, Security to enforce these prohibitions. OFAC's
Exports, and New Investment With Respect to FAQs provide further details on the expanded
Continued Russian Federation Aggression.” U.S. import ban and related determinations. In a
Treasury Secretary Janet Yellen stated that the separate but related action, OFAC issued GL 85,
new EO aims to counteract Russia’s authorizing specific wind-down activities
circumvention of U.S. sanctions and export involving Expobank, designated to the SDN List
controls, particularly targeting foreign financial on December 12, 2023.
institutions that aid in transactions related to
Russia’s military-industrial base. Secretary Impactful in 2023
Yellen emphasized the expectation for financial
institutions to diligently avoid facilitating In the final days of the last Congress, President
evasion and warned of decisive action against Biden signed two important bills just before the
those aiding Russia’s military capabilities. holiday season. These bills are significant for
their provisions related to sanctions, export
Concurrently, the U.S. Department of Treasury's controls, and supply chain restrictions:
Office of Foreign Assets Control (OFAC)
implemented several measures under the new First, on December 23, 2022, the National
EO. This included two new Determinations and Defense Authorization Act (NDAA) for Fiscal
an amended Determination under EOs 14024 Year 2023 was signed into law (Public Law
and 14068, the issuance of three general 117-263). This act includes several provisions
licenses (GLs), twelve new and three revised concerning U.S. export controls and sanctions.
Frequently Asked Questions (FAQs), and a Key aspects include additional sanctions aimed
Sanctions Advisory for Foreign Financial at Burma, a ban on the use of Chinese
Institutions. These measures, effective semiconductors by U.S. government agencies,
immediately, were coordinated with G7 allies. and measures related to Russia's invasion of
Notably, the new authority under the December Ukraine.
22 EO allows OFAC to impose sanctions on Then, on December 29, 2022, the Consolidated
foreign financial institutions for significant Appropriations Act, 2023, was enacted (Public
transactions in certain sectors supporting Law 117-328). This act features various
Russia's military-industrial base or for sanctions-related provisions, notably the
facilitating the supply of specified items to authorization for transferring forfeited assets to
Russia. assist Ukraine and funding initiatives to address
forced labor and enforce sanctions.
Global economy and financial instability

Significant highlights of these newly enacted -The NDAA, in Section 9107, requires a report
legislations are outlined below: on coordination between the Department of
State’s Office of Sanctions Coordination and the
Sanctions-Related Provisions Treasury Department.
-The NDAA requires the Secretary of State to The Consolidated Appropriations Act establishes
formulate a strategy for disrupting narcotics the Financial Integrity Fund within the Treasury
production and trafficking linked to the regime Department to reward whistleblowers reporting
of Bashar al-Assad in Syria, as per Section 1238. sanctions evasion or money laundering. It also
This includes plans to dismantle narcotic authorizes the transfer of forfeited property for
networks and utilize sanctions under the Caesar aiding Ukraine and includes funding for
Syria Civilian Protection Act of 2019. implementing the Global Magnitsky Human
Rights Accountability Act.
-Section 1243 of the NDAA mandates the
Secretary of Defense to report on the impact of Export Control and Supply Chain Provisions
U.S. sanctions on Russian military
advancements and behaviors of Russian private -The NDAA extends export controls on certain
military companies. munitions to Hong Kong Police Force through
2024.
-The BURMA Act of 2022, incorporated in the
NDAA, imposes sanctions on Burmese -It initiates a pilot program for enhanced
government officials and state-owned intelligence support in export controls and
enterprises, with specific provisions for foreign investment screening.
mandatory and discretionary sanctions.
-The NDAA imposes prohibitions on U.S.
-Section 5590 of the NDAA requires the government procurement of semiconductor
President to report on non-U.S. persons products and services from certain Chinese
involved in significant transactions of Russian companies.
gold and imposes corresponding sanctions.
-The Consolidated Appropriations Act fully
-The NDAA emphasizes the U.S. policy of funds the implementation of the Uyghur Forced
holding Iranian officials accountable for human Labor Prevention Act.
rights abuses, as per Section 5592.
-The Banking Transparency for Sanctioned
Persons Act, included in the NDAA, requires an
annual report on licenses issued for financial
transactions involving state sponsors of
terrorism or persons under Global Magnitsky
Sanctions.
-Section 6807 of the NDAA calls for a
semi-annual assessment of the effects of
sanctions related to Russia's invasion of
Ukraine.
On December 15, 2022, the United States Sanctions on Russian crude oil
Department of the Treasury’s Office of Foreign
Assets Control (OFAC) expanded its sanctions On November 22, 2022, the US Department of
list by adding Public Joint Stock Company the Treasury’s Office of Foreign Assets Control
Rosbank and 17 subsidiaries of VTB Bank Public (OFAC) issued a new determination under
Joint Stock Company to the Specially Designated Executive Order 14071 dated April 6, 2022. This
Nationals and Blocked Persons List (SDN List). determination, titled “Determination Pursuant
Concurrently, the United States Department of to Section 1 (a)(ii) of EO 14071,” enforces a
State made designations under Executive Order price cap policy on Russian crude oil. This policy
14024 against Vladimir Potanin, a known was initially outlined in OFAC’s September 2022
associate of Russian President Vladimir Putin preliminary guidance concerning the ban on
and recent acquirer of Rosbank. Potanin, along services linked to the maritime transportation
with three of his family members and his of Russian crude oil. Alongside this, OFAC
company Interros, were added to the SDN List. released a guidance document, “OFAC Guidance
Additionally, the State Department designated on Implementation of the Price Cap Policy for
29 regional Russian officials and five individuals Crude Oil of Russian Federation Origin,” which
from the Board of Directors of Russian Railways provides additional details on the
to the list. determination and its requirements.
Furthermore, OFAC also issued three new
Following these designations, OFAC updated Russia-related General Licenses.
and issued several Russia-related General
Licenses and added new Frequently Asked The key points of the Determination Pursuant
Questions (FAQs) pertaining to these to Section 1 (a)(ii) of EO 14071 are as follows
designations.
The Determination restricts the exportation,
Details of the New SDN List Additions reexportation, sale, or supply, directly or
indirectly, from the United States, or by a US
The designations by OFAC and the State Person, of specific categories of services related
Department imply full blocking sanctions for the to the maritime transport of Russian crude oil.
listed parties. U.S. Persons are generally These categories include trading/commodities
prohibited from engaging in any transactions, brokering, financing, shipping, insurance
directly or indirectly, with SDNs, entities owned (including reinsurance and protection and
50% or more by one or more SDNs, or their indemnity), flagging, and customs brokering,
properties. Non-U.S. Persons may face liabilities collectively known as "Covered Services." U.S.
for causing violations involving U.S. Persons in Persons are allowed to provide these services if
transactions with SDNs, and are also at risk of the Russian crude oil is bought at or below a
secondary sanctions for providing material price cap set by the Secretary of the Treasury in
support to SDNs. Previously, VTB Bank and some consultation with the Secretary of State. This
of its subsidiaries were added to the SDN List in Determination becomes effective on December
February 2022, with similar sanctions imposed 5, 2022, at 12:01 a.m. eastern standard time,
by the United Kingdom and Canada on Rosbank with specific conditions for crude oil loaded
earlier in the year. before this date.
New and Revised Russia-Related General This Determination follows similar actions taken
Licenses in September 2022 targeting Russia’s quantum
computing sector and in May 2022 focusing on
OFAC reissued and amended the Russia-related accounting, trust and corporate formation, and
General License 8E, now including Rosbank management consulting services.
among the financial institutions authorized for
transactions related to energy, effective until The Guidance document details the setting of
May 16, 2023. the price cap for Russian crude oil, which will be
determined by the Price Cap Coalition,
Additionally, OFAC issued two new General comprising the United States, Australia, the EU,
Licenses and other G7 countries. It elaborates on various
aspects of the price cap policy, including the
-General License 58 allows U.S. Persons, under calculation of the cap, its applicability, criteria
certain conditions, to wind down transactions for determining Russian-origin crude oil,
involving Rosbank or its majority-owned entities compliance red flags, and covered services. The
until March 15, 2023. This license also permits document also outlines the requirements for
the rejection of certain transactions involving safe harbor from OFAC enforcement and
Rosbank entities until the same date. relevant licensing information. This Guidance
supplements the preliminary guidance issued
-General License 59 permits U.S. Persons to
by OFAC in September 2022.
divest or transfer securities of Rosbank or its
majority-owned entities to non-U.S. Persons,
and to wind down certain derivative contracts.
This includes transactions necessary for
facilitating, clearing, and settling trades of
covered debt or equity placed before December
15, 2022, authorized until March 15, 2023.
Focus on the UK’s expanded Russia sanctions OFSI report 2023
Regime
On December 14, 2023, the Office of Financial
In Late February 2022, the Russian President Sanctions Implementation (OFSI) released its
Vladimir Putin recognized Luhansk and Donetsk annual review for the fiscal year 2022-2023,
as independent states on 22 February, and providing an overview of its activities and
launched the invasion of eastern Ukraine on the outlining future priorities and trends.
24th of February. Since that date, Western
governments, including the US, the EU, the UK, Highlights of the Russia Sanctions
Canada, Australia, New Zeeland and couple of
other states, have dropped diplomatic The report emphasizes the UK's intensified
negotiations to impose a drastic set of sanctions regime against Russia, noting that by
Sanctions in response. Every Western countries March 31, 2023, sanctions were imposed on
have different starting points for their Russian "130 oligarchs and family members," who
sanctions regime, and there has been a clear collectively held an estimated net worth of
sense that the European Union was determined approximately £145 billion at the start of
to catch-up US sanctions and coordinate Russia's invasion of Ukraine. Additionally, as of
efficiently in order to break the Russian invasion October 2023, OFSI reports that £22.7 billion of
on the get-go. Russian assets have been frozen since February
2022.
Western sanctions target perpetrators, elites,
strategic industries, and the financial system. Enforcement and Implementation Efforts
Some of the most spectacular sanctions where
Giles Thomson, the director of OFSI, mentions in
undertaken directly against President Vladimir
the report's foreword that the organization is
Putin, and Foreign Affairs Minister Sergueï
shifting towards a more proactive enforcement
Lavrov, among a series of well-established
model. The report reveals OFSI's engagement in
oligarchs, and Russia's largest commercial
several complex investigations related to Russia,
banks such as VTB or Sberbank. They have had
anticipating these will lead to public
their assets frozen in most of the Western
enforcement actions. During the financial year,
countries jurisdictions.
OFSI recorded 473 suspected financial sanctions
Another spectacular measure was the removal breaches (excluding oil price cap and
sine die of Russian Financial institutions from counter-terrorism breaches), resulting in 7
the SWIFT international messaging system in an warning letters for confirmed breaches not
effort to block Russia's access to the global warranting public action, 2 monetary penalties,
financial system, with a ban on Russian and 51 cases closed without further action (44
sovereign debt trade. The Russian central bank, of which related to Russia-related sanctions
the Ministry of Finance and the Russian wealth breaches). The OFSI Licensing Unit made
fund have also been tarted. Some key strategic decisions on 503 cases, granting licenses in 283
industries fall under restrictive measures or a cases and rejecting 9 applications.
ban from Western countries. Some key
companies involved in the SMO in Ukraine have
also been targeted. Western companies are also
banned from buying Russian energy or in
restrictive conditions.
Expansion of OFSI: OFAC also designated 11 entities and seven
individuals under the Belarus-related Executive
In response to the increased volume of Order 14038 for their role in supporting the
activities, OFSI significantly expanded its team in Belarusian regime and Russia’s war in Ukraine.
the 2022-2023 financial year. The enforcement OFAC issued Belarus General License 10,
team grew by 175%, the licensing team by permitting the wind-down of transactions
160%, and the guidance and engagement team involving Tabak Invest LLC until February 2,
by 120%. 2024. Additionally, OFAC designated over 150
individuals and entities for supporting Russia’s
Future Outlook military and defense base and issued General
Licenses 79 and 80 for winding down
Looking forward, OFSI plans to adopt a more
transactions with certain parties designated on
proactive enforcement approach and enhance
December 12, 2023.
its information monitoring and intelligence
capabilities. This will involve collaboration with UK Sanctions and Export Control Updates
strategic partners, law enforcement, and
industry regulators, particularly in high-risk and The UK Government announced sanctions
under-reporting sectors. OFSI also aims to against 46 new targets on December 6, 2023.
increase its international engagement, planning These targets include entities in third countries
joint webinars and private sector engagements like Belarus, China, Serbia, Turkey, the UAE, and
with the U.S. Office of Foreign Assets Control Uzbekistan, and consist of foreign military
(OFAC). Additionally, OFSI intends to continue suppliers to Russia, supporters of the Wagner
expanding its industry engagement, focusing on Group network, and operators of vessels used
priority sectors such as financial services, by Russia to bypass oil-related sanctions.
fintech/crypto, legal, accountancy, property,
high-value dealers, and NGOs. The sanctions list includes three Chinese
entities involved in supplying goods critical to
US Sanctions and Export Control Updates Russia’s war efforts, a Turkish entity supplying
Western electronics to Russia, four UAE-based
On December 5 and 6, 2023, the US and UK entities using opaque corporate structures for
Governments respectively announced a series Russian oil trade, and 31 Russian individuals
of new sanctions and export control measures and entities linked to drone and missile part
directed at Russia. These actions target manufacturing and key electronic component
individuals and entities in third countries that supply.
are aiding Russia’s military and defense
industries, particularly in its conflict in Ukraine. This action marks over 30 third-country actors
targeted by the UK, underscoring its
The US Department of the Treasury’s Office of commitment to preventing sanction
Foreign Assets Control (OFAC) implemented circumvention and Russia’s access to global
sanctions against a network led by a goods and services. The UK’s National Crime
Belgium-based individual, Hans De Geetere. This Agency, in collaboration with other agencies,
network includes nine entities and five issued a ‘Red Alert’ notice to the regulated
individuals across Russia, Belgium, Cyprus, sector, highlighting red flags associated with
Sweden, Hong Kong, and the Netherlands, attempts to evade sanctions in exporting
involved in procuring electronics with military high-risk goods to Russia.
applications for Russian end-users. The US
Department of Commerce’s Bureau of Industry In the context of these sanctions, the G7
and Security (BIS) added De Geetere and five announced new measures against Russia on
entities to the Entity List, while the US December 6, 2023. These measures aim to
Department of Justice (DOJ) unsealed reduce Russia’s revenue for its war efforts and
indictments against De Geetere for exporting include import restrictions on non-industrial
sensitive military-grade technology to China and diamonds from Russia by January 1, 2024, with
Russia. Belgian authorities also arrested De further phased restrictions on Russian
Geetere and others in relation to this diamonds processed in third countries by
procurement scheme. OFAC’s Under Secretary March 1, 2024.
for Terrorism and Financial Intelligence, Brian E.
Nelson, emphasized the commitment to UK Introduces New Regulations to Tighten
enforcing sanctions and export controls. Sanctions and Export Controls on Russia
BIS added a total of 42 entities to the Entity List On December 14, 2023, the UK Government
for supporting Russia’s military and defense enacted two new regulations - The Russia
industrial base. This includes entities involved in (Sanctions) (EU Exit) (Amendment) (No. 4) and
co-producing drones with Iran and illicit (No. 5) Regulations 2023. These amendments to
attempts to acquire high-priority items. Specific The Russia (Sanctions) (EU Exit) Regulations
attention was given to entities associated with 2019 aim to intensify restrictions on goods,
the development of a UAV production facility in technology, and funding sources believed to aid
Russia, capable of producing thousands of Russia's conflict in Ukraine. Most of these
Shahed-136 drones for use in Ukraine. amendments became effective on December
15, 2023, while others are set to commence on
December 26, 2023, and January 1, 2024.
Global
Key Changeseconomy
Introduced by theand financialExpanded
Regulations instability
Prohibitions on Luxury Goods: The
existing restrictions on supplying luxury goods
Additional Export Restrictions: The regulations to Russia now also include the provision of
expand sanctions to include various goods and technical assistance, financial services, and
technologies, restricting their export, supply, brokering related to such goods. Exceptions to
and availability to Russia. Notably added to these trade restrictions have been expanded.
Schedules 2A (Critical-industry goods and
technology), 3C (Defence and Security Goods Further Financial Measures
List), and 3E (The G7 dependency and further
goods list) are items such as certain chemicals, Correspondent Banking: The amendment
electrical goods, metals, vehicles, and machine prohibits UK credit and financial institutions
parts. The UK Government emphasizes that only from processing payments in any currency
low-risk, humanitarian, and health exports indirectly from designated financial institutions
remain unsanctioned. Additionally, these items under the Russia Regulations, with certain
are subject to restrictions on technical exceptions.
assistance, financial services, and related
brokering. Divestment Licences: New licensing grounds are
introduced for transactions with designated
New Import Restrictions on Metals: The parties to facilitate divestment from Russia.
regulations introduce restrictions on importing
and acquiring specific metals and supplying Frozen Asset Reporting: Designated persons
them to third countries. These metals, detailed under the Russia financial sanctions regime are
in Schedule 3BA, include copper, nickel, now obligated to report assets they hold. Firms
aluminum, among others. A grace period is holding assets subject to financial service
established for metals shipped from Russia restrictions must report these assets to OFSI.
before December 15, 2023, and imported to the
UK before January 14, 2024. A General Trade General Licences
Licence concerning the acquisition of metal Two new General Licences were introduced:
warrants has also been introduced.
An OFSI General Licence allowing payment
Iron and Steel Restrictions: The regulations add processing from or via certain newly designated
a new category of controlled iron and steel banks, including non-sterling payments from or
products to Schedule 3B Part 4. These products, via Sberbank, expiring on December 22, 2023.
however, are not subject to the September 2023
import restrictions on iron and steel containing A trade General Licence authorizing the
Russian iron/steel. An exception is provided for acquisition of metals warrants on a global metal
goods consigned from Russia before December exchange under certain conditions.
15, 2023, and imported to the UK before
January 14, 2024. These regulatory changes reflect the UK's
commitment to limiting resources that could
Import Restrictions on Russian Diamonds: potentially support Russia’s activities in Ukraine,
Effective January 1, 2024, there will be while also highlighting the need for businesses
restrictions on importing and acquiring to conduct diligent reviews for compliance.
diamonds and diamond jewelry from Russia,
with related technical assistance, financial
services, and funding restrictions. A personal
use exemption is included, and standard CEMA
enforcement powers are extended to these
imports.
Australia adopted further goods export Additionally, there have been ongoing export
sanctions sanctions for Crimea and Sevastopol,
particularly targeting infrastructure-related
On October 25, 2023, the Australian items in the transport, telecommunications,
Government released two new designations, energy, and resources sectors.
further expanding its export sanctions against
Russia and certain regions of Ukraine, including The introduction of these new sanctions
Crimea, Sevastopol, Donetsk, and Luhansk. underscores the Australian Government's
These new designations identify additional commitment to responding to the evolving
categories of goods as “export sanctioned situation in Ukraine and Russia. Businesses
goods,” effectively prohibiting their export to dealing with exports in these categories must
these regions under the existing regulatory now ensure compliance with the updated
framework. regulations to avoid potential legal
repercussions.
Details of the New Export Sanctions
Review of Australia's Autonomous Sanctions
The newly designated goods that are now Framework by DFAT and ASO
subject to export sanctions include
The Department of Foreign Affairs (DFAT),
Interchangeable Tools: This category covers a through its Australian Sanctions Office (ASO), is
wide range of tools for hand or machine-tools, conducting a comprehensive review of
such as those used for pressing, stamping, Australia’s Autonomous Sanctions Framework.
punching, tapping, threading, drilling, boring, This review is timely, considering the impending
broaching, milling, turning, or screw driving. It expiry of the current Regulations on April 1,
also includes dies for drawing or extruding 2024. The objective is to evaluate the
metal, and rock drilling or earth boring tools. Framework's effectiveness and fitness for
purpose. The process includes an assessment
Nuclear Reactors, Boilers, Machinery, and based on feedback to an Issues Paper and
Mechanical Appliances: This broad category consultations with key stakeholders. The
encompasses various machinery and deadline for submissions is set for February 26,
mechanical devices, including all their parts. 2023, and the review is expected to conclude by
June 30, 2023.
Electrical Machinery and Equipment: This
includes sound recorders and reproducers, This Review opens the floor for interested
television image and sound recorders and entities to suggest enhancements to the
reproducers, along with their parts and autonomous sanctions regime. This initiative
accessories. comes in the context of the significant
expansion of Australia's autonomous sanctions
The prohibition on exporting these goods to
over the past year, particularly with new
Russia and the specified Ukrainian regions is
measures against Russia and the introduction of
mandated under sub-regulation 4(3) of the
designated party sanctions under the Magnitsky
Autonomous Sanctions Regulations 2011.
measures.
Context and Previous Sanctions
These new measures build upon Australia’s
existing export sanctions against Russia, which
previously included restrictions on certain
luxury goods, arms or related materials,
aluminium, and items used in oil exploration.
Global
Key Issues economy
and Potentialand financialAustralia
Improvements instability
Expands Sanctions Against Russian
Identified in the Issues Paper Individuals and Entities
Streamlining the Legal Framework: The current On February 24, 2023, the Australian
Framework involves navigating three tiers of Government escalated its response to Russia's
legislative instruments, which could be invasion of Ukraine by imposing additional
simplified either by establishing a two-tiered targeted financial sanctions and travel bans.
structure or consolidating multiple instruments This latest round of sanctions affects 90
related to a specific country or theme. individuals and 40 entities. The individuals
targeted include Russian ministers responsible
Clarity on Scope of Sanctions Measures: for key sectors such as energy, natural
Enhancements are proposed for certain resources, industry, education, labor, migration,
sanctions measures, like 'targeted financial and health. These sectors are deemed critical to
sanctions' and 'sanctioned commercial Russia's economy and strategy, or they pose
activities', by providing more precise definitions threats to Ukraine's territorial integrity and
and guidance to aid public comprehension of sovereignty.
sanctions obligations.
Among the entities now facing sanctions are
Permit Powers: More detailed outlining of the major players in Russia's defense and
Minister’s permit granting powers within the technology sectors:
Regulations could enhance transparency and
public awareness regarding permit options. Kalashnikov Concern: One of Russia's foremost
arms manufacturers.
Humanitarian Exemption: Considering the
potential impact of sanctions on humanitarian Admiralty Shipyards: Known for their
assistance, a specific exemption for legitimate development of submarines.
humanitarian activities might be introduced,
with safeguards to ensure compliance. Tupolev: A prominent aviation company.

Sanctions Offences and Enforcement: The Makeyev Rocket Design Bureau: Specialists in
introduction of civil pecuniary penalties is missile design.
proposed as a more flexible enforcement option
for addressing non-compliance, especially in Kurganmashzavod: A producer of infantry
cases where criminal conviction is not fighting vehicles.
warranted.
With these new designations, Australia has
Review Mechanism for Designations and enforced over 1,000 sanctions in reaction to
Declarations: Suggestions include streamlining Russia's aggressive military actions in Ukraine,
the renewal process for designations and travel demonstrating its firm stance against the
bans, possibly by removing the expiry date or invasion and its commitment to supporting
extending it to five years. Ukraine's sovereignty.

Regulatory Functions of the ASO: Expanding the

injunction power in the Act to allow an
authorized person within DFAT to seek
injunctive relief, as currently, it is limited to
applications by the Attorney-General. The
review presents a crucial opportunity to refine
and enhance Australia’s sanctions regime,
ensuring it remains effective and relevant in the
current geopolitical climate.
New EU Sanctions New Entity Listings: 29 entities supporting
Russia’s military-industrial complex have been
On December 18, 2023, the European Union added to the restricted list, tightening export
announced the implementation of its 12th controls.
package of sanctions against Russia,
encompassing Regulation (EU) 2023/2878 and Expansion of Transit Ban: The existing transit
Regulation (EU) 2023/2875, which amend ban for dual-use items via Russia has been
Regulations (EU) 833/2014 and 269/2014, extended to certain industrial items.
respectively. These amendments, collectively
known as the "12th EU Russia Sanctions Enforcement of Oil Price Cap: Enhanced
Package," became effective on December 19, information sharing requirements and
2023, and significantly impact businesses notification rules for tanker sales aim to support
engaged with Russia, including those planning the price cap mechanism on Russian oil.
divestment.
‘No Russia’ Clause: EU exporters are required to
Key Elements of the 12th EU Russia Sanctions insert contractual clauses prohibiting re-exports
Package to Russia, particularly for sensitive military
items.
Expansion of Controlled Business Services: The
prohibition under Article 5n on certain services Iron and Steel Import Controls: New Annexes list
to the Russian Government or entities has been partner countries with equivalent import
expanded to include a ban on software for control measures and extend wind-down
enterprise management and industrial design periods for specific steel products.
used in key sectors.
Exemptions for Personal Use: Import restrictions
Wind-Down of ‘Partner Country’ Exemption: have been eased for personal use items and
The exemption for providing controlled business diplomatic vehicles.
services to Russian subsidiaries of EU or partner
country companies will be phased out by June Reporting Obligations for Large Transfers:
20, 2024, necessitating authorization for Reporting is required for fund transfers over
continued service provision. EUR 100,000 linked to Russian entities or
nationals.
Extension of Divestment Licensing Grounds:
Deadlines for licensing divestment-related Restrictions on Russian Crypto-Asset Services: A
transactions have been extended to June 30, ban on Russian nationals or residents owning or
July 31, or September 30, 2024, depending on controlling entities providing crypto-asset
the sanction. services.

Ban on Russian Diamonds: A phased import ban Additional Designated Persons (DPs): 61
on diamonds and diamond products originating individuals and 86 entities in various sectors
from or transiting Russia will be implemented have been newly designated, including
starting January 1, 2024. AlfaStrakhovanie Group.

Additional Import Bans: New bans on items These sweeping sanctions reflect the EU's
generating significant revenue for Russia, such ongoing response to Russia's actions and are set
as specific metals and liquefied propane, have to significantly affect international trade,
been introduced. financial transactions, and other business
operations connected with Russia.
Additional Export Bans: The EU has banned the
export of items contributing to Russia’s military
capabilities, including certain chemicals, lithium
batteries, and drone components.
Czech Republic introduced unilateral sanctions The National Sanctions List (NSL)
against Russia
Maintenance by the Ministry: The NSL,
In response to the evolving sanctions landscape managed by the Ministry, records entities based
following Russia's invasion of Ukraine, the Czech on Government decisions. It is publicly
Republic has demonstrated a commitment to accessible on the Ministry's website.
more proactive and flexible use of sanctions.
This shift is evident in the adoption of the Current Status: As of the Sanctions Act's
Sanctions Act, which came into force on January publication, no entities have been listed on the
3, 2023, as Act No. 1/2023 Coll., on restrictive NSL.
measures against certain serious acts in
international affairs. Rights and Procedures for Sanctioned Entities

Overview of the Sanctions Act Filing Objections: Sanctioned entities can object
to their inclusion on the NSL, which the Ministry
The Sanctions Act establishes a framework for reviews and forwards along with its opinion to
adding entities to either the Czech national the Government.
sanctions list (NSL) or the EU sanctions list
(EUSL). It addresses situations where immediate Government Review: The Government must
action is necessary or where EU-level measures make a decision on the objection within 30 days
are unattainable, thereby allowing for a more of receipt.
agile national response to international issues.
Appeal Process: Negative decisions can be
Listing Procedures Under the Sanctions Act appealed in court, though the appeal does not
suspend the entity's sanctioned status pending
Role of the Ministry of Foreign Affairs: The the appellate decision.
Ministry is responsible for gathering, verifying,
and assessing the grounds for listing entities on The Czech Government's Sanctions Act
the NSL or EUSL. Proposals for adding, altering, represents a significant step in aligning national
or removing entities from these lists are then actions with the broader EU sanctions
submitted to the Czech Government. framework, while also providing the flexibility
needed for timely responses to international
Dual Listing Proposals: The Ministry can propose events. This Act underscores the Czech
entities for inclusion on both the NSL and the Republic's active role in addressing global
EUSL, ensuring comprehensive application of security challenges through sanctions.
sanctions.
Government Decision-Making: The Government
decides on the inclusion of entities on the NSL
or EUSL based on the Ministry's proposals. This
decision includes determining the scope of
restrictive measures against the concerned
entities.
Japan announces sanctions and bans against Japan Enhances Sanctions Against Russia as of
Russia December 15, 2023
The Japanese government has escalated its The Japanese government, on December 15,
sanctions against Russia, introducing several 2023, declared a reinforcement of its sanctions
new measures as of May 26, 2023. These regime against Russia. This update outlines the
actions reflect Japan's ongoing response to the key aspects of the latest sanctions:
situation in Ukraine and Crimea.
-Asset Freeze on Individuals and Entities: Japan
Key Sanctions Introduced by Japan has imposed an asset freeze on 35 individuals
and 44 entities. These designated parties are
Additional Designations: Japan has designated located in Russia, Ukraine, or the UAE. As a
17 new individuals and 78 entities connected to result of this action:
the Russian Federation. Furthermore, 7
individuals linked to the annexation of Crimea -Restrictions on Payments: Making payments to
and Sevastopol or involved in destabilizing these sanctioned parties from within Japan or
Eastern Ukraine have also been sanctioned. by Japanese residents is now prohibited.
These designations result in the following
restrictions: -Prohibited Capital Transactions: Engaging in
certain capital transactions with these parties,
-Payment Restrictions: A license is now required such as creating deposit contracts, trust
to make payments to these designated persons contracts, or loan contracts, is forbidden under
or entities. the Foreign Exchange and Foreign Trade Act of
Japan.
-Capital Transaction Restrictions: Engaging in
capital transactions, such as deposits, trusts, -Export Ban to Specific Organizations: A total of
and loan contracts with the designated 57 entities in Russia and 6 entities in other
individuals or entities, also requires a license. countries have been identified as specified
entities. Consequently, exporting any items
-Export Ban to Designated Russian Entities: from Japan to these entities is strictly
Starting June 2, 2023, Japan has imposed an prohibited.
export ban targeting the 80 Russian entities
listed in the Ministry of Foreign Affairs' notice -Import Ban on Non-Industrial Diamonds from
dated May 26, 2023. Russia: Starting January 1, 2024, Japan will
enforce an import ban on non-industrial
-Export Ban on Industrial Infrastructure diamonds shipped from Russia. The ban
Reinforcement Goods: An additional measure includes items classified under HS codes
includes an export ban on goods related to the 7102.10, 7102.31, and 7102.39.
reinforcement of industrial infrastructure in the
Russian Federation. The specifics of this ban will These measures reflect Japan's continued
be announced at a later date. commitment to applying economic pressure on
Russia in response to its actions in Ukraine. The
-Service Ban to the Russian Federation: Japan is sanctions are aimed at limiting financial and
set to prohibit specific services to the Russian trade engagements with designated individuals
Federation, including construction and and entities, thereby contributing to the global
engineering services. effort to address the conflict.
These expanded sanctions by Japan represent a
significant step in the global response to
Russia's actions in Ukraine and Crimea. They
aim to apply economic pressure and limit
Russia's access to key goods and services,
contributing to international efforts to address
the crisis.
Fighting Financial Crime in 2024
This section examines the impact of worldwide economic and financial volatility on
driving structural changes, reshaping regulatory frameworks in response to global
developments and events in 2022. These include the inflation and monetary challenges
in the Eurozone, various sanctions, societal shifts post-COVID-19, developments in the
healthcare sector, cyber and financial crimes, and supply chain disruptions amid global
shortages.

Global economic entities are navigating an increasingly intricate regulatory

environment, allocating substantial financial resources to prepare for the emergence of
artificial intelligence and algorithms, the advent of Central Bank Digital Currencies
(CBDCs), and managing in an environment of regulatory fluctuation.

The role of the Compliance Office is to provide regulatory guidance and tools to enable
global economic entities to effectively manage these organizational changes. Top legal
experts and management consultants collaborate closely to offer transformative
solutions to complex organizations, ensuring compliance with regulatory mandates.

Key evolution trends : what to expect in 2024? 3. Strengthening of Sanctions and Compliance
Measures
Regulations aimed at fighting financial crime
have evolved significantly during 2022-2023. In response to various global events, there was
Governments and international organizations a significant strengthening of sanctions:
have introduced several measures to combat
money laundering, fraud, terrorism financing, Targeted Sanctions: Increased use of targeted
and other illicit activities. This article will sanctions against individuals, organizations, and
provide an overview of some of the key countries involved in financial crimes.
regulations and their impact on the global
financial system. Compliance Requirements: Financial
institutions faced heightened compliance
1. The Expansion of Anti-Money Laundering requirements to ensure adherence to
(AML) Directives international sanctions.

In 2022-2023, many jurisdictions expanded 4. Enhanced Focus on Cryptocurrency

their Anti-Money Laundering directives. These Regulations
expansions often included:
Cryptocurrencies, often used for money
Enhanced Due Diligence (EDD): Financial laundering and terrorism financing, saw
institutions are required to perform additional increased regulation:
checks and balances on high-risk customers.
Know Your Customer (KYC) for Crypto
Wider Coverage: AML regulations started to Exchanges: Crypto exchanges were required to
cover more businesses, including implement strict KYC procedures.
cryptocurrencies, online marketplaces, and
fintech companies. Transaction Monitoring: Enhanced monitoring
of cryptocurrency transactions to identify
Stricter Reporting Requirements: There was an suspicious activities.
increase in the stringency of reporting
suspicious activities. 5. The FATF’s Revised Recommendations

2. The Introduction of the Global Corporate The Financial Action Task Force (FATF), an
Transparency Initiative international watchdog, revised its
recommendations:
This initiative mandates that companies
disclose their beneficial owners, aiming to Higher Standards for Virtual Assets: New
prevent the use of shell companies for illicit guidelines for the treatment of virtual assets
activities. Key elements include: and their service providers.

Public Registers of Beneficial Ownership: Risk-Based Approach: Emphasis on a risk-based

Companies are required to report their approach for countries to identify and mitigate
beneficial owners and make this information their financial crime risks.
publicly available.
6. Data Protection and Privacy Regulations
Cross-border Cooperation: Enhanced sharing of
With the increase in financial surveillance, data
beneficial ownership information between
protection and privacy regulations were also
countries to track illicit financial flows.
updated.
Balancing Financial Surveillance with Privacy:
Regulations were introduced to ensure that
measures to combat financial crime do not
violate individual privacy rights.
Introduction : sustainable economy, financial stability
and geopolitical tensions

International Monetary Fund (IMF) Strategy on The Directors have emphasized the need for a
Money Laundering (ML) multipronged approach and synergies across
various IMF workstreams to support member
The 2023 report on the International Monetary countries in enhancing their AML/CFT
Fund's (IMF) strategy for Anti-Money frameworks. They also highlighted the
importance of tailoring support to members
Laundering and Combating the Financing of with capacity weaknesses and preferring
Terrorism (AML/CFT) reviews the AML/CFT issues to be addressed through
implementation of the AML/CFT program tailored CD support.
adopted by the IMF Executive Board in 2018. It
provides an overview of the current approach The Directors welcomed the CD activities
towards money laundering (ML) and terrorism delivered by the staff and agreed with the
financing (TF) risks and includes an in-depth Fund’s CD strategy to provide comprehensive
analysis of the staff's work under key IMF support, responding flexibly to the evolving
demands of membership. They noted the
workstreams—surveillance, financial sector importance of understanding ML/TF risks for
assessment programs (FSAPs), Fund-supported further developing the CD program, especially in
programs, AML/CFT assessments, and capacity areas like digital money laundering, corruption,
development (CD). The report highlights the tax evasion, and environmental crimes.
integration of AML/CFT issues into other Fund
policies and contributions to the global The Directors concurred on the importance of
AML/CFT agenda through coordination with integrating financial integrity issues into other
Fund policies and welcomed the proposal for
stakeholders to leverage synergies and avoid deeper engagement with a broader range of
duplication of work. external stakeholders, including collaboration
with international and regional organizations,
Since the 2018 review, the coverage of financial civil society, and leveraging global and regional
integrity issues has increased across all partnerships to maximize the impact of the
workstreams. The IMF staff has enhanced its Fund's AML/CFT work program.
understanding of ML/TF risks and the
macroeconomic impact of financial crimes using Finally, the Directors highlighted the importance
a range of data. This has led to increased of the Fund's engagement in AML/CFT
assessments, focusing on quality and
coverage of AML/CFT issues in surveillance and consistency. They were open to increasing the
related conditionality in Fund-supported pace of assessment-related work, potentially
programs. The staff has contributed to delivering two Fund-led assessments and
discussions on the stability and soundness of participating in one FSRB-led assessment per
member countries' financial sectors and has year from FY 2028 onward, subject to resource
participated in AML/CFT assessments by the allocation. They also noted that the next review
FATF Global Network. The current policy allows of the AML/CFT Strategy would be expected
for conducting one to two assessments per within the next five years.
year, and the staff has been able to deliver at
least one assessment annually.
The Executive Directors of the IMF have
acknowledged the importance of addressing
ML, TF, and proliferation financing risks as
integral to supporting the integrity and stability
of the international financial system and
member countries' economies. They support
the continued enhancement of the staff's
understanding of financial integrity risks with a
focus on assessing and mitigating negative
macroeconomic impacts.
Global economy and financial instability

FATF Recommendations updates Technological Advancements and Compliance

The FATF is known for its role in setting 2012: Limited acknowledgment of technology’s
international standards for combating money role in financial crimes.
laundering, terrorist financing, and other
related threats to the integrity of the 2023: Acknowledgment of digital currencies and
international financial system. The Financial fintech, with updated guidelines on how to
Action Task Force (FATF) plays a pivotal role in monitor and regulate these new technologies.
shaping the global response to combating
financial crimes. Over the years, the FATF Enhanced International Cooperation
Recommendations have been revised to address
emerging threats and enhance the efficacy of 2012: Focus on mutual legal assistance and
the AML/CFT measures. This article compares information sharing.
the 2012 Recommendations with the 2023 2023: Strengthened international cooperation
updates, highlighting key changes and their mechanisms, including improved information
implications. sharing and joint efforts in cross-border
A Shift Toward a Risk-Based Approach investigations.

2012: Emphasis on establishing a The evolution of the FATF Recommendations

comprehensive legal framework. from 2012 to 2023 reflects the dynamic nature
of the financial sector and the continuous
2023: Enhanced focus on a risk-based approach, efforts to combat financial crimes effectively.
encouraging countries to identify, assess, and The updated recommendations demonstrate a
understand their specific financial crime risks nuanced understanding of the changing
and to apply AML/CFT measures accordingly. landscape of financial crime, emphasizing a
more targeted, risk-based approach and
Addressing New Types of Financial Crimes adapting to technological advancements.

2012: Traditional focus on money laundering Recommendation 8 update

related to drug trafficking and organized crime.
The Financial Action Task Force (FATF) has
2023: Broadening the scope to include updated Recommendation 8 and its Interpretive
emerging financial crime threats such as Note to correct misapplications that led to
cybercrime, cryptocurrency-related crimes, and excessive regulatory burdens on Non-Profit
environmental crimes. Organisations (NPOs). These changes recognize
the crucial role of NPOs in society and aim to
Increased Transparency and Beneficial safeguard them from terrorist financing abuse
Ownership while ensuring their effective operation. The
revision mandates countries to identify NPOs as
2012: Basic requirements for transparency in defined by FATF and evaluate their terrorist
financial transactions. financing risks. Emphasizing a risk-based
approach, the amendments specify that only
2023: Stricter guidelines on beneficial NPOs at high risk need stringent measures. The
ownership transparency to prevent misuse of updated Recommendation 8 ensures that
legal entities for money laundering or terrorist oversight of NPOs is focused and proportionate,
financing. avoiding unnecessary burdens that could
impede their legitimate activities and impact
economic and human rights. This approach
allows for a balanced oversight of NPOs,
ensuring security without stifling their vital
contributions.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Monitoring alternative payment mechanisms Within the scope of this project, crowdfunding
encompasses both formal crowdfunding
The conflicts in Gaza, Nigeria, and military platforms and crowdfunding activities
situations in Myanmar and parts of Africa conducted on social media, messaging apps, or
highlight the inadequacy of watchlists in halting dedicated websites. It also takes into account
hybrid crowdfunding approaches that blend
terrorist financing. There's a growing need to digital and physical fundraising. The diversity in
disrupt financial networks that support crowdfunding methods allows for multiple
oppressive regimes. The Financial Action Task funding sources and financial intermediaries to
Force (FATF) and the United Nations have be involved, whether knowingly or
pinpointed cryptocurrencies and crowdfunding unknowingly, in supporting TF through
as major fundraising avenues for terrorists, crowdfunding.
signalling a probable increase in regulatory
actions in these sectors in the near future. The report identifies four primary ways in which
crowdfunding platforms can be misused for TF
purposes. In practice, terrorists and violent
The report "Crowdfunding for Terrorism extremists often employ a combination of
Financing," published in October 2023 by FATF, techniques to raise funds. For instance, a
delves into how crowdfunding is exploited for terrorist may initiate a fundraising campaign on
terrorism financing. It outlines the growth of a dedicated crowdfunding platform, promote
crowdfunding, its susceptibility to misuse, and the campaign on social media, and request
the challenges in regulating and monitoring payment in virtual assets (VA).
these activities. The report also discusses
different crowdfunding models, typologies of 1. Abuse of Humanitarian, Charitable, or
abuse, and best practices for mitigating risks. It Non-Profit Causes: Crowdfunding relies
emphasizes the need for global cooperation and inherently on the generosity of supporters
a comprehensive understanding of who donate to specific initiatives.
crowdfunding's role in terrorism financing to Humanitarian, charitable, and non-profit
effectively combat these threats. causes can serve as effective covers for
financial solicitation and, in some cases, are
Crowdfunding has emerged as a significant
global market, and experts anticipate its
exploited for TF purposes. This report
continued growth and evolution in the years highlights three manifestations of this
ahead. It serves as an innovative fundraising activity:
solution utilized by individuals worldwide to
finance legitimate ideas, projects, or business a. Individuals not affiliated with a registered
ventures. However, it is susceptible to charity or non-profit organization launch a
exploitation by malicious actors. Terrorist financial appeal for a humanitarian or social
organizations have proven their adaptability in cause, but the funds raised ultimately
capitalizing on permissive environments to support terrorism-related activities or
carry out their activities. actors.
While the majority of crowdfunding activities b. Charities launch appeals for funds but fail
are legitimate, research conducted by the to carry out the advertised humanitarian
Financial Action Task Force (FATF) reveals that activities and divert all or part of the funds
entities such as the Islamic State of Iraq and the
for TF.
Levant (ISIL), Al-Qaeda, as well as ethnically or
racially motivated terrorist (EoRMT) individuals c. Non-profit organizations (NPOs)
and groups have exploited crowdfunding for the
crowdfunding for a legitimate purpose may
purpose of raising funds for terrorist financing
(TF). The allure of quickly and easily accessing a fall victim to extortion or skimming if they
global audience makes crowdfunding an operate in high-risk environments
appealing method for fundraising in support of controlled by terrorist groups.
TF.
2. Utilization of Dedicated Crowdfunding
This FATF report represents the first Platforms or Websites:
comprehensive international examination of TF
connected to crowdfunding. It draws insights In the year 2022, there were more than 6
from the FATF Global Network, industry experts, million crowdfunding campaigns worldwide,
academia, and civil society to deepen our a staggering volume of activity. The sheer
understanding of the methods and techniques magnitude and diversity of activities on
employed by terrorists in crowdfunding and to crowdfunding platforms present significant
explore best practices for countering this challenges in detecting unlawful actions.
particular threat. It also builds upon previous Implementing effective self-regulatory
reports issued by the FATF Global Network on
related subjects.
measures is crucial to ensure that activities
on these platforms remain lawful and do
not violate their terms of service.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Regrettably, specialized platforms have The intricate nature of crowdfunding

emerged to cater to individuals who have been operations, the scarcity of data, and the
banned from mainstream platforms. Among employment of anonymizing techniques further
these individuals and groups, ethnically or complicate tracing efforts for law enforcement,
reporting entities, and supervisors.
racially motivated terrorist (EoRMT) actors have
been observed utilizing these platforms to Intermediary platforms that provide
generate funds for various purposes, some of crowdfunding services often struggle to identify
which may be within the bounds of the law TF-related activity on their platforms. This
(e.g., fundraising for legal fees, supporting challenge arises due to limited training and TF
political campaigns, paying membership dues, expertise among their staff, as well as the
and funding protests). These actors, in absence of reporting mechanisms to alert
authorities about potential TF activities. The
particular, may exploit crowdfunding for willingness of companies to take action and
activities that propagate hate or violence remove illicit content varies.
without necessarily crossing the threshold of
terrorism. Several countries have reported examples of
best practices to address these challenges.
Utilization of Social Media Platforms and These include enhancing comprehension of the
Messaging Apps national crowdfunding industry's nature and
scope and incorporating crowdfunding into their
Social media platforms and online messaging National Risk Assessment. Outreach efforts
services offer users the ability to connect with within the crowdfunding sector have also
local or global communities, amplify their proven effective in enhancing the identification
and reporting of potential TF activities. Robust
messages, and build momentum for their domestic and international information-sharing
causes. However, these platforms also play a mechanisms, along with public-private sector
pivotal role in the success of crowdfunding collaboration, constitute essential components
campaigns and are thus strategically utilized by of effective counterterrorism and anti-money
terrorist actors for the purpose of terrorist laundering/countering the financing of
financing (TF). These actors disseminate terrorism (AML/CFT) endeavors.
campaign links or payment instructions to their
This report recommends that jurisdictions and
followers, recruit supporters, provide guidance all stakeholders involved in the crowdfunding
on evading detection, and exploit features like industry must recognize and comprehend the TF
encryption to transmit sensitive information. risks associated with this activity. They should
Sophisticated algorithms on social media implement risk-based measures in proportion to
platforms further direct users to content based the potential abuses, aligning with United
on their search history, potentially reinforcing Nations Security Council Resolution 2462. Given
extremist beliefs and steering users toward crowdfunding's global reach, countries should
specific fundraising causes they might not have be mindful of the cross-border nature of
fundraising activities and take precautions to
otherwise encountered. prevent their jurisdiction from being used to
finance terrorism abroad.
Interaction of Crowdfunding with Virtual
Assets Additionally, countries should acknowledge that
the crowdfunding sector is evolving, and TF risks
As digital forms of payment continue to evolve may evolve over time. Prioritizing public-private
on a global scale, the crowdfunding industry has information sharing is crucial, and countries
also integrated funding options linked to virtual should engage in ongoing outreach and
assets (VAs). While Bitcoin has been the most awareness-raising efforts with private sector
prominent, other types of VAs, such as privacy stakeholders. This practice enhances the
coins, are gaining recognition and pose detection of potential TF activities, fosters a
deeper mutual understanding of the industry
distinctive challenges for investigators. and its control mechanisms, and ensures that
Anonymity-enhancing services like tumblers legitimate crowdfunding activities are not
and mixers can also be employed by threat unnecessarily restricted.
actors to further obscure the origin and
destination of funds associated with TF. Considering the interconnectedness of
Nevertheless, the use of VAs may have certain crowdfunding with other financial and
limitations for TF, as converting VAs to fiat non-financial sectors, countries should fully
implement the relevant FATF Standards
currency is not always convenient, and the concerning virtual assets (VAs), non-profit
value of specific VAs can fluctuate dramatically. organizations (NPOs), and money or value
The adoption of VAs for TF crowdfunding transfer services. It is essential to avoid treating
campaigns may vary, necessitating ongoing crowdfunding as an isolated sector. Lastly,
evaluation by countries. countries should adopt a multi-stakeholder
approach that involves national authorities, the
The report underscores the challenges faced by private sector, civil society, and academia when
government authorities and stakeholders within developing risk mitigation strategies related to
the crowdfunding ecosystem when it comes to crowdfunding. This approach ensures due
detecting and deterring terrorist financing (TF). diligence with regard to human rights and
prevents hindrances to legitimate fundraising
Law enforcement agencies dealing with activities.
suspected cases of TF associated with
crowdfunding encounter difficulties in
establishing that the funds were utilized for
terrorism-related activities.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Artificial intelligence will enhance the fight

against financial criminality to another level
Bias and Fairness: AI systems are only as
The financial sector has witnessed a seismic unbiased as the data they are trained on.
shift in its operational dynamics, thanks to the There's a risk of inherent biases in these
systems, leading to unfair targeting or
advent of Artificial Intelligence (AI) and overlooking certain transactions or individuals.
Machine Learning (ML). These technologies are
playing a pivotal role in combating financial Regulatory Compliance: As AI in financial crime
crimes, a critical concern for financial technology evolves, so does the regulatory
institutions globally. Financial crimes, including landscape. Financial institutions must stay
fraud, money laundering, and cyber theft, pose abreast of these changes to ensure their AI and
significant threats not only to the financial ML applications comply with legal standards.
health of institutions but also to their integrity Reliance on Technology: Over-reliance on AI and
and customer trust. ML could lead to complacency in human
oversight. It's crucial to maintain a synergy
The Role of AI and ML in Detecting Financial between human intelligence and machine
Crimes capabilities.
Pattern Recognition and Anomaly Detection: AI The integration of AI and ML in financial crime
and ML excel in identifying patterns and technology represents a significant
anomalies in vast datasets. In the context of advancement in the fight against financial
financial crimes, these technologies analyze crimes. These technologies offer efficient,
real-time solutions that can adapt to the
millions of transactions to detect unusual ever-evolving nature of financial crimes.
patterns indicative of fraudulent activities. This However, it is vital to address the challenges and
capability is especially crucial in identifying considerations to ensure that the use of AI and
complex money laundering schemes that ML in financial systems is effective, ethical, and
human analysts might overlook. legally compliant. As technology continues to
evolve, so must the strategies to utilize it in
Predictive Analytics: By leveraging historical safeguarding the financial sector.
data, AI algorithms can predict future trends
and potential areas of risk. This foresight Artificial intelligence significantly streamlines
the process of suspicious activity reporting
enables financial institutions to proactively (SAR). It not only automates report generation
implement measures to mitigate risks of but also populates them with pertinent
financial crimes before they occur. information, enhancing the efficiency of the
entire process. SARs typically undergo an
Enhanced Due Diligence: AI-driven systems internal review involving multiple Anti-Money
streamline the due diligence process by quickly Laundering (AML) personnel and senior
processing and analyzing large volumes of data. management before being submitted to
This includes scrutinizing client backgrounds regulatory authorities. This internal procedure
and monitoring transactions, which are can encompass gathering and interpreting data
essential steps in preventing money laundering from various global regions and in different
languages.
and associated financial crimes.
Financial crime technology simplifies the SAR
Real-time Transaction Monitoring: ML process by utilizing algorithms that
algorithms can monitor transactions in real automatically fill reports with relevant data,
time, providing immediate alerts on suspicious presenting it in a unified, standardized
activities. This real-time analysis is far more language. This standardization minimizes
efficient than traditional methods, allowing for bureaucratic hurdles and ensures uniformity
prompt action against potential financial across all contributions, focusing more on
crimes. regulatory compliance. By streamlining
language and terminology, AI not only speeds
up and enhances the effectiveness of AML
Automating Compliance Reporting: Compliance reporting but also boosts the impact of these
with financial regulations is a significant aspect reports in subsequent investigations by
for institutions. AI and ML aid in automating the authorities.
generation of compliance reports, ensuring
accuracy and consistency while saving Reducing Noise in AML Systems
considerable time and resources.
The primary benefit of automating AML systems
Challenges and Considerations is the increased speed and efficiency it brings to
complex compliance processes. However, a
While AI and ML offer groundbreaking significant challenge in these systems is the
prevalence of 'noise' or false positives, often
solutions, there are challenges and ethical due to incomplete data or overly sensitive AML
considerations: measures. These false positives mean that only
a small percentage of AML alerts actually result
Data Privacy: Ensuring the privacy of customer in full SARs, leading to wasted time, money, and
data while employing AI tools is paramount. resources. Financial crime technology,
Institutions must navigate the delicate balance particularly AI, offers a solution to this problem
between surveillance for security purposes and by providing deeper insights into customer
respecting individual privacy rights. behaviors and transaction patterns, helping to
eliminate irrelevant alerts and reduce the
burden of compliance on both firms and
customers.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Five AML reputational risk considerations for 3. The Impact of Technology Failures
2024
With AML heavily reliant on technology, any
Anti-Money Laundering (AML) efforts are not failure in these systems can lead to significant
only a compliance necessity but also a critical reputational risk. Financial institutions must
ensure that their AML technology is not only
component of maintaining a financial advanced but also reliable. In 2024, it's
institution's reputation. In an era where expected that AML systems will need to operate
information is instantaneously global, a single seamlessly, with any downtime or inaccuracies
lapse in AML controls can result in significant in monitoring potentially leading to public
reputational damage. Here are five scrutiny and reputational harm.
considerations for AML reputational risk as we
move into 2024. 4. Global Collaboration and Partnerships
AML is a global concern, and financial
1. Increased Transparency and Reporting institutions often need to collaborate across
Obligations borders. In 2024, the reputational risk extends
to the partners and third parties that
In 2024, transparency is not just a regulatory institutions work with. Due diligence on all
requirement; it's a customer expectation. partners is crucial, as the missteps of one can
Financial institutions will need to disclose their affect the reputation of all associated parties.
AML efforts more openly, including the Institutions will need to carefully select their
effectiveness of their programs. Reporting global partners, ensuring that they share the
obligations are set to increase, with institutions same commitment to AML compliance.
needing to provide detailed and clear reports b5. Social Media and Instantaneous News
on how they are preventing money laundering.
Failure to do so can lead to distrust among Social media continues to amplify reputational
stakeholders and customers, damaging the risk by providing a platform for instant judgment
institution’s reputation. and widespread dissemination of compliance
failures. In 2024, institutions will have to be
2. The Rise of Ethical Banking proactive in managing their social media
presence, being ready to address any
Consumers and businesses are increasingly AML-related concerns swiftly and transparently
choosing financial partners based on their to prevent reputational fallout.
ethical stance and practices. Institutions that In 2024, AML compliance is inseparable from
fail to demonstrate a strong commitment to reputational management. Financial institutions
preventing financial crimes may find themselves must be proactive in their AML strategies,
at a competitive disadvantage. A robust AML transparent in their reporting, ethical in their
program is now a part of corporate social practices, diligent in their technology usage,
responsibility, and institutions must selective in their partnerships, and responsive in
communicate their AML successes and their communications. AML is not just a
strategies as part of their ethical branding. regulatory issue; it's a key factor in how an
institution is perceived in the market. Thus,
managing AML reputational risk is essential for
the trust and confidence of customers, partners,
and the broader public.
Global regulatory instability: 2024 trends
The global economic landscape has been dramatically reshaped in response to a series
of challenges faced in 2022, including the inflation and monetary crisis in the eurozone,
the implementation of sanctions, evolving post-COVID-19 societal norms, the tumult in
the health sector, pervasive cyber and financial crimes, and the widespread disruption
of supply chains amid global shortages. These developments have necessitated a rapid
transformation of the regulatory environment as governments and financial
institutions strive to keep pace with the dynamic global trends and mitigate financial
instability.

Confronted with an intricate web of new regulations, global economic entities have
allocated substantial funds to proactively address the burgeoning influence of artificial
intelligence, the emergence of central bank digital currencies (CBDCs), and the
volatility within the regulatory framework. To navigate these changes, Compliance
Vision has stepped up, developing regulatory roadmaps and providing essential tools
designed to empower economic actors to effectively manage organizational
transitions. This has been made possible through the collaborative efforts of top legal
experts and management consultants, who have joined forces to deliver strategic,
transformative solutions that align with the latest compliance mandates.

North America & Canada at the forefront of FinCEN Exchange

virtual assets regulations
On September 16, 2022, the White House On November 2, 2023, the Financial Crimes
released a detailed briefing that presented a Enforcement Network (FinCEN) hosted a
new framework along with policy proposals for collaborative event termed a FinCEN Exchange,
the ethical evolution of digital assets, in line which brought together various stakeholders to
with Executive Order (EO) 14067 issued in
March of the same year. This briefing, a first in discuss the challenges of combating the use of
its series, synthesizes insights from nine federal convertible virtual currencies (CVCs) in terrorist
agency reports, establishing a comprehensive financing. This dialogue, prompted by the
strategy for the forward-thinking development attacks in Israel on October 7, saw participation
of digital assets and setting the stage for
subsequent initiatives both domestically and from U.S. financial institutions, tech companies,
internationally. and social media platforms.
The collective recommendations from these The FinCEN Exchange, established by the
reports are designed to catalyze innovation by
initiating private sector research and bolstering Anti-Money Laundering Act of 2020, is a
the position of pioneering American companies platform designed to foster innovative
in the international arena. Alongside these public-private information sharing partnerships.
innovation-driven goals, the reports underscore These collaborations are critical for identifying
the need for robust safeguards against a
spectrum of risks, such as fraudulent activities, and understanding the complexities of illicit
theft, and the mismanagement of crypto-assets. financial activities. By November 2023, over
7,600 firms had joined this initiative,
The briefing articulates seven strategic recognizing the value of pooling resources and
directives for federal entities:
intelligence to tackle such challenges.
1.Safeguarding consumers, investors, and
businesses. The Financial Action Task Force (FATF) reported
in 2022 a notable increase in terrorist groups'
2.Ensuring the stability of the financial system.
use of decentralized, blockchain-based systems
3.Combating illicit finance. for raising funds, with a particular preference
for the stablecoin Tether (USDT). Svetlana
4.Strengthening American leadership and Martynova from the United Nations
competitiveness in global finance.
Counter-Terrorism Committee Executive
5.Enhancing access to financial services. Directorate observed a significant rise in
terrorist attacks potentially financed through
6.Encouraging responsible technological cryptocurrencies, estimating that the figure
innovation. might reach around 20%.
7.Considering the implementation of a United
States Central Bank Digital Currency (CBDC). To address these concerns, FinCEN issued an
alert on October 20, 2023, listing several red
Central to the new framework is the call for flags indicative of suspicious activities linked to
federal agencies to develop guidelines that
confront current and foreseeable dangers terrorist financing. Among these indicators, the
within the digital asset sphere, ensuring robust alert pointed out risks associated with
protection for consumers, investors, and transactions involving money services
businesses. The U.S. Treasury is tasked to businesses offering CVC services, particularly
collaborate with other agencies to secure
financial stability by identifying and scrutinizing those operating in jurisdictions with a high risk
potential strategic threats stemming from the of terrorist activities and inadequate customer
digital asset marketplace. due diligence measures. It also noted the red
flag of charitable organizations that solicit
donations, including virtual currencies, without
delivering tangible charitable services.
Additionally, it highlighted the risks of
transactions linked to virtual currency addresses
known or suspected of association with terrorist
financing.
Introduction : sustainable economy, financial stability
and geopolitical tensions

FinCEN sanctions against Russia framework This guidance builds upon a September 2022
fact sheet where FinCEN detailed pivotal
Following Russia's military actions in Ukraine in aspects of the "reporting rule," including the
2022, the US government responded with a definition of reporting companies (both
series of sanctions. Over the course of a year domestic and foreign), the criteria for
determining beneficial owners and company
from February 2022 to 2023, the US Office of applicants, specifics of what BOI reports must
Foreign Assets Control (OFAC) added over 2,500 contain, and the deadlines for these
names to its Specially Designated Nationals and submissions. This rule represents the initial step
Blocked Persons (SDN) List. in FinCEN's execution of the beneficial
ownership registry required by the Corporate
During this period, the Financial Crimes Transparency Act (CTA), with two additional
Enforcement Network (FinCEN) and the Bureau rules concerning access to the registry and
of Industry and Security (BIS) issued joint alerts amendments to the customer due diligence
in both 2022 and 2023, urging businesses to be (CDD) rule forthcoming.
more alert to potential Russian efforts to
circumvent these sanctions. These alerts
highlighted specific indicators of evasion to Simultaneously, at the second Summit for
watch for. As a result, numerous firms filed Democracy, Secretary Janet L. Yellen announced
Suspicious Activity Reports (SARs) that the U.S. commitment, supported by over twenty
uncovered nearly $1 billion in suspect countries, to reinforce beneficial ownership
transactions. The submissions not only transparency. This pledge adheres to updated
facilitated investigative and enforcement FATF standards and encompasses legislative
updates, the establishment of a beneficial
actions but also provided critical data for teams ownership registry with stringent data
tasked with overseeing Russian financial requirements, robust personal data protection,
operations. The key patterns and trends and international cooperation enhancement.
identified in these SARs are expected to bolster
the ongoing joint efforts by US regulatory Canada, too, is advancing its legislative
bodies and the financial sector to prevent framework to bolster corporate transparency.
sanctions evasion. Following updates to the CBCA in 2022, a
proposed bill aims to establish a public
New rules on BOI beneficial ownership registry, fast-tracked for
accessibility by the end of 2023 in response to
the transparency demands underscored by the
On March 24, 2023, FinCEN released new "Freedom Convoy" events.
guidelines pertaining to the beneficial
ownership information (BOI) reporting In conclusion, with the ongoing development
requirements set to be effective from January 1, and enactment of beneficial ownership
2024. Targeting mainly the small business registries, North American firms must stay
sector, these guidelines offer an array of informed about regulatory developments and
resources, including an FAQ document, the FATF’s revised guidance on beneficial
informative summaries on submission deadlines ownership, particularly Recommendation 24, to
ensure compliance and proper implementation.
and essential inquiries, as well as two
educational videos.
Post-Brexit UK and the EU facing the Energy The Deal’s goals are clear:
crisis, and Green Deal policies
1.No net emissions of greenhouse gases by
In recent years, the United Kingdom and the 2050
European Union have found themselves
grappling with a significant energy crisis. This 2.Economic growth decoupled from resource
situation has arisen due to a combination of use
factors including geopolitical tensions, natural
gas shortages, and a surge in demand 3.No person and no place left behind
post-COVID-19 recovery. These challenges have
This Deal encompasses various policy initiatives,
coincided with ambitious climate action plans
ranging from the large-scale deployment of
under the European Green Deal, which aims to
renewable energy to the renovation of
make Europe climate-neutral by 2050. Balancing
buildings, boosting the circular economy, and
the immediate energy needs with long-term
sustainable agriculture practices.
sustainability goals has become a pressing
concern for policymakers. Tackling the Crisis with Green Policies
The Energy Crisis: Causes and Impacts The energy crisis has, paradoxically,
underscored the urgency of the European Green
The energy crisis in the UK and EU has been
Deal. Transitioning to renewable energy sources
primarily fueled by increasing gas prices,
is seen not only as a response to climate change
precipitated by the reduced supply from Russia,
but also as a solution to energy dependence.
traditionally one of the largest providers of
The EU is accelerating the deployment of wind
natural gas to Europe. The transition away from
and solar power, investing in energy efficiency,
fossil fuels has been complicated by the need
and exploring alternative energy sources such as
for stable and affordable energy sources. As
hydrogen.
energy prices soar, both consumers and
industries face mounting pressure, with many However, the transition is not without its
calling for immediate government intervention challenges. The upfront costs of renewable
to mitigate the economic impact. energy infrastructure, the need for
technological innovation, and the social
The crisis has illuminated the region's
implications of transitioning away from a fossil
dependency on imported fossil fuels and
fuel-based economy are significant hurdles.
highlighted the need for a diversified energy mix
Moreover, the rapid shift has to be managed in
and increased self-reliance. Energy security has
a way that ensures energy affordability and
thus become a top agenda, influencing not only
reliability.
economic policies but also foreign relations and
defense strategies. UK's Approach: Balancing Act Between
Immediate Needs and Future Goals
The European Green Deal: A Framework for
Change The UK, while no longer part of the EU, faces
similar challenges and has set ambitious climate
The European Green Deal is the EU's response
goals of its own. It has pledged to cut carbon
to these challenges, offering a comprehensive
emissions by 78% by 2035 compared to 1990
policy framework that sets out to transform the
levels. The UK's energy strategy includes
union into a modern, resource-efficient, and
expanding offshore wind farms, investing in
competitive economy.
nuclear power as a clean energy source, and
promoting the use of electric vehicles.
Introduction : sustainable economy, financial stability
and geopolitical tensions

As the UK navigates post-Brexit waters, it Diplomatic relations between the UK and EU

continues to align with the EU on many have been strained, as negotiations over the
environmental goals, recognizing the global Northern Ireland Protocol and fishing rights
nature of the challenge. The energy crisis has have sometimes led to a war of words and
threats of legal action. Both sides have had to
prompted the UK to fast-track some of its green work towards establishing a cooperative yet
initiatives, but also to ensure that the transition competitive relationship.
supports economic growth and
competitiveness. Regulatory Divergence and Standards

The energy crisis in the UK and EU presents The UK's desire to diverge from EU regulations
both a challenge and an opportunity. It has to create a competitive edge has led to
revealed vulnerabilities in the current energy challenges in maintaining standards and
certifications for goods and services. This
system but also accelerated the shift towards regulatory divergence has been a double-edged
renewable energy and the goals outlined in the sword, offering the UK the freedom to set its
European Green Deal. As the UK and EU own standards but at the cost of complicating
continue to face the immediate repercussions trade with the EU.
of the energy shortages, the policies and
investments made today are crucial for shaping The EU has had to ensure that its standards are
a sustainable, secure, and prosperous future. upheld while also preventing the creation of a
The success of these efforts will depend on the regulatory "race to the bottom." Balancing the
integrity of the single market with the need to
ability of governments, industries, and citizens remain competitive globally has been a delicate
to collaborate on this unprecedented transition task.
towards a greener economy.
Social and Human Impact
Post-Brexit challenges for UK and the EU
Brexit has had profound social implications,
The years following Brexit have charted a affecting everything from the rights of EU
course through uncharted waters for both the citizens in the UK to the movement of workers.
United Kingdom and the European Union. As The end of freedom of movement has had
we look back from 2026, the period from 2023 significant consequences for industries reliant
on EU labor, such as agriculture, healthcare, and
to the present has been marked by a series of hospitality. Both the UK and the EU have faced
economic, political, and social challenges that demographic shifts and labor shortages,
both sides have had to face and navigate. The requiring adaptations in immigration policies.
divorce, which officially took place in January
2020, has had long-lasting implications that Looking Forward
have shaped the landscape of European politics
and economics. As we stand in 2026, it is clear that the
post-Brexit journey has been challenging for
Trade and Economic Repercussions both the UK and the EU. They have had to
redefine their relationship in a world that has
not stood still, dealing with global challenges
One of the most immediate post-Brexit like climate change, pandemics, and geopolitical
challenges was establishing a new economic shifts. The UK and EU have learned to
relationship. Trade frictions surfaced as collaborate in areas of mutual interest while
businesses adjusted to new regulations, competing in others.
customs checks, and border controls, leading to
delays and increased costs. The UK, outside the The post-Brexit era from 2023 to 2026 has been
single market and customs union, had to forge a testament to the resilience and adaptability of
new trade agreements while managing the both the UK and EU. It has involved a
reevaluation of priorities, relationships, and
economic fallout from lost EU partnerships. roles on the global stage. While challenges
remain, this period has also opened up new
The EU, on the other hand, faced the challenge opportunities for innovation, cooperation, and
of losing one of its largest economies. This had growth. As both entities continue to evolve, the
implications for the EU budget and also shifted lessons learned during these transformative
the dynamics of intra-EU trade. Both parties years will undoubtedly influence their paths
have had to combat the economic ripple effects forward.
amidst the global pressures of inflation and
supply chain disruptions.
Political and Diplomatic Strains
Brexit has also been a test of political resilience.
The UK grappled with internal pressures from
Scotland and Northern Ireland, where Brexit
has reignited debates about independence and
the rekindling of historical tensions,
respectively. The EU has had to reaffirm unity
among member states, with Brexit giving
momentum to eurosceptic movements within
the bloc.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Post-Brexit Adjustments to UK AML and Anti-Bribery Regulations Post-Brexit

Anti-Bribery Regulations
UK Bribery Act: The UK Bribery Act 2010, which
The UK's departure from the European Union predates Brexit, continues to be a cornerstone
has provided an impetus for reassessing and of the UK's anti-bribery framework. Recognized
as one of the most stringent anti-bribery laws
reforming its regulatory landscape, particularly globally, it sets out offences for bribery, being
in the spheres of Anti-Money Laundering (AML) bribed, the bribery of foreign public officials,
and anti-bribery. Without the obligation to align and the failure of commercial organizations to
with EU directives, the UK has the opportunity prevent bribery.
to refine its approach to combatting financial
crimes, while still cooperating with International Cooperation: Post-Brexit, the UK
international standards and partners. has maintained a strong commitment to
international cooperation in combatting bribery.
AML Regulations Post-Brexit This involves working with international
organizations and continuing cross-border
collaboration with law enforcement agencies.
Maintaining International Standards: The UK
remains committed to international AML Enforcement and Prosecution: The Serious
standards set by the Financial Action Task Force Fraud Office (SFO) and the National Crime
(FATF). Post-Brexit, the UK has continued to Agency (NCA) continue to be the primary
enforce robust AML regulations, reflecting the agencies responsible for enforcing anti-bribery
FATF's recommendations to ensure the integrity laws. There's an ongoing focus on prosecuting
of the financial system. not just individuals but also companies that fail
to prevent bribery.
Adapting EU Legislation: After Brexit, existing
Ongoing Commitments and Developments
EU AML directives were transposed into UK law.
However, the UK can now modify these laws to Transparency and Reporting: The UK is expected
better fit domestic needs. This could involve to enhance its commitment to corporate
streamlining reporting requirements, enhancing transparency and reporting, potentially
due diligence processes, or introducing new introducing new requirements that go beyond
technologies for monitoring transactions. the EU's Fourth and Fifth AML Directives.

Sanctions Regime: The UK has established its Public-Private Partnerships: There's a growing
emphasis on public-private partnerships to fight
own sanctions regime, operated by the Office of financial crime, with initiatives like the Joint
Financial Sanctions Implementation (OFSI). This Money Laundering Intelligence Taskforce
allows the UK to independently impose (JMLIT) serving as models for collaborative
sanctions on individuals and entities as part of efforts.
its AML strategy.
Technological Advancements: The UK is
Register of Beneficial Ownership: The UK has positioned to leverage technological
committed to enhancing transparency in advancements in regulatory technology
corporate ownership. The Companies House (RegTech) to improve AML and anti-bribery
measures, making processes more efficient and
reform aims to increase the accuracy and effective.
usability of the corporate register, which is an
essential tool in the prevention of money Global Influence: The UK aims to retain a
laundering. leading role in setting global standards for AML
and anti-bribery, influencing policies through its
active participation in international forums.
Middle-eastern countries are facing Socioeconomic Considerations
unprecedented financial challenges (UAE &
Saudi Arabia) Labor Market Reforms: Both countries have
been reforming their labor markets, focusing on
From 2023 to 2026, the financial landscapes of increasing the employment of their citizens. The
the United Arab Emirates (UAE) and Saudi challenge lies in creating enough high-quality
Arabia have faced significant challenges. These jobs for the growing number of young nationals
challenges stem from a complex interplay of entering the workforce.
global economic trends, regional geopolitical
dynamics, and the ambitious economic Social Changes: The societal changes, especially
diversification plans both countries are in Saudi Arabia, such as increased women's
undertaking. participation in the workforce, while positive,
also require careful management to ensure
Diversification Efforts Amidst Oil Dependency social cohesion and acceptance.
Reducing Oil Dependency: Both the UAE and Financial Sector Development
Saudi Arabia have historically relied heavily on
oil revenues. The global shift towards Banking Sector Evolution: The banking and
renewable energy and the volatility of oil prices financial sectors in both countries face the need
have highlighted the need for economic to innovate and integrate new technologies.
diversification. However, transitioning from an Adapting to global financial trends like fintech,
oil-based economy to a more varied economic blockchain, and digital currencies, while
model has its challenges, including the maintaining financial stability, is a significant
development of new sectors and the re-skilling challenge.
of the workforce.
Attracting Foreign Investment: While both
Vision 2030 in Saudi Arabia: Saudi Arabia's countries have made strides in attracting foreign
Vision 2030, an ambitious plan to reduce the investment, ongoing improvements in business
kingdom's dependence on oil, diversify its environments, regulatory frameworks, and legal
economy, and develop public service sectors, systems are necessary to remain competitive on
has faced hurdles. These include the massive the global stage.
investment required, the need for regulatory
reforms, and the challenge of cultivating a Environmental and Sustainability Challenges
private sector capable of driving economic
Climate Change and Sustainability: As part of
growth outside the oil industry.
the global community, the UAE and Saudi Arabia
Geopolitical Tensions and Economic Impacts face pressure to contribute to climate change
mitigation. Investing in sustainable technologies
Regional Instability: Geopolitical tensions in the and green energy is vital, but it requires
Middle East can impact investor confidence and significant financial commitment and strategic
economic stability in both the UAE and Saudi planning.
Arabia. Navigating these tensions while
maintaining economic growth and investor Water Scarcity: Water scarcity is a critical issue
interest is a delicate balance. in these arid countries, necessitating investment
in sustainable water management technologies
International Relations: The relationship with and practices.
global powers, particularly in the context of oil
production and supply, continues to be a critical
factor. Balancing national interests with global
energy demands and political dynamics is a
constant challenge.
Introduction : sustainable economy, financial stability
and geopolitical tensions

UAE Anti-Money Regulatory Framework Regulatory Bodies and Compliance

The United Arab Emirates (UAE) has established Financial Intelligence Unit (FIU): The UAE FIU,
a robust Anti-Money Laundering (AML) known as 'goAML', is a key component of the
regulatory framework, reflecting its AML framework. Institutions are required to
register with goAML and report suspicious
commitment to combating money laundering transactions.
(ML) and financing of terrorism (FT). This
framework aligns with international standards, Oversight by Various Authorities: Different
particularly those set by the Financial Action regulatory bodies, including the Central Bank of
Task Force (FATF), and covers a wide range of the UAE, the Securities and Commodities
financial and non-financial institutions. Authority, and the Insurance Authority, enforce
compliance within their respective sectors.
Key Components of the UAE AML Framework
Compliance Obligations for Entities: Entities
Federal Laws and Decrees: The cornerstone of covered under the AML laws include banks,
financial institutions, insurance companies,
the UAE's AML framework is the Federal Designated Non-Financial Businesses and
Decree-Law No. (20) of 2018 on Anti-Money Professions (DNFBPs), and Virtual Asset Service
Laundering and Combating the Financing of Providers (VASPs). They are required to
Terrorism and Illegal Organizations. This law implement stringent AML and CFT measures,
was further strengthened by amendments conduct customer due diligence, maintain
under Federal Decree-Law No. (26) of 2021. records, and report suspicious activities.

Implementing Regulations: Cabinet Decision Risk Assessment and Due Diligence: Entities
No. (10) of 2019 provides the implementing must perform risk assessments to understand
their exposure to ML/FT risks and apply
regulations for Decree-Law No. (20) of 2018, enhanced due diligence for high-risk customers.
detailing procedures and requirements for
compliance. This Decision was updated by Training and Awareness: Regular training
Cabinet Resolution No. (24) of 2022. programs are mandated for employees of
regulated entities to ensure awareness and
Beneficial Ownership Regulation: Cabinet compliance with AML regulations.
Decision No. (58) of 2020 outlines the
procedures for regulating beneficial ownership, Challenges and Evolution
aimed at enhancing transparency in business The UAE continues to evolve its AML framework
operations and ownership structures. in response to emerging global trends in
financial crimes. Ongoing challenges include
Administrative Penalties and Violations: Cabinet adapting to new methods of money laundering,
Resolution No. (53) of 2021 specifies integrating new technologies for effective
administrative penalties for violations related to monitoring and reporting, and ensuring
beneficial ownership regulations. consistent compliance across all sectors.

Unified List of Violations and Fines: Cabinet The UAE's AML regulatory framework
Decision No. (16) of 2021 enumerates a unified represents a comprehensive and evolving
system aimed at preventing and combating
list of violations and corresponding financial crimes. Through continuous updates
administrative fines related to ML/FT measures, and stringent enforcement, the UAE strives to
under the supervision of the Ministry of Justice maintain a secure and transparent financial
and Ministry of Economy. environment in alignment with international
standards.
Terrorism Lists and UN Resolutions: Cabinet
Resolution No. (74) of 2020 involves the
regulation of terrorism lists and the
implementation of UN Security Council
resolutions on counter-terrorism and
proliferation of weapons of mass destruction.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Saudi Arabia's Regulatory Reforms Since 2020 Financial Sector and Fintech: The Saudi Arabian
Monetary Authority (SAMA) has introduced
ince 2020, Saudi Arabia has embarked on a reforms to modernize the financial sector,
significant journey of regulatory reform, largely including promoting fintech and digital banking.
as part of its Vision 2030 program. This This includes launching a regulatory sandbox for
fintech experiments and issuing licenses for
ambitious plan aims to diversify the economy, digital banks.
reduce dependence on oil, and develop public
sectors such as health, education, Legal and Judicial Reforms: The kingdom has
infrastructure, recreation, and tourism. These initiated significant legal reforms, including
reforms span various sectors, reflecting the overhauling its commercial laws to improve the
kingdom's commitment to modernization and business environment and protect investors'
global integration. rights. Efforts have also been made to increase
transparency and efficiency in the legal and
Key Regulatory Reforms judicial system.
Social Reforms: In line with Vision 2030’s
Economic Diversification and Investment Laws: objectives, social reforms have been significant.
To reduce its reliance on oil, Saudi Arabia has These include easing restrictions on gender
reformed its investment laws to attract foreign segregation, allowing women to drive, and
investors. This includes easing ownership and opening up new opportunities in arts, sports,
operational restrictions for foreign companies, and entertainment.
particularly in strategic sectors like mining,
logistics, and manufacturing. Environmental and Sustainability Initiatives:
Saudi Arabia has committed to environmental
Capital Market Development: The Capital sustainability, introducing regulations to reduce
carbon emissions and invest in renewable
Market Authority (CMA) has implemented energy projects.
reforms to deepen the Saudi capital market,
attract foreign investment, and align with Challenges and Future Outlook
international standards. This includes the listing
of Aramco, the world's largest IPO, and opening While these reforms have been broadly
the stock market to foreign investors. welcomed, challenges remain in their
implementation and in balancing traditional
Labor and Employment Reforms: Significant societal norms with modernization. The success
labor reforms have been introduced, including of these reforms is crucial for the kingdom's
economic future and its role in the global
improved rights for women and expatriate economy.
workers. The kingdom has launched initiatives
to increase women's participation in the Saudi Arabia's regulatory reforms since 2020
workforce and has reformed its kafala represent a transformative phase in the
(sponsorship) system to improve the mobility kingdom's history, reflecting its ambition to
and rights of foreign workers. become a diversified, innovative, and globally
integrated economy. The changes encompass
Tourism and Cultural Sector: With the economic, social, and legal spheres, all
introduction of a new tourist visa, Saudi Arabia contributing to the overarching vision of a
modernized, resilient, and sustainable Saudi
has opened up to international visitors. Reforms Arabia by 2030. The ongoing developments
in this sector aim to develop tourism as a signal the kingdom's commitment to change
significant economic contributor, respecting the while adapting to both internal needs and
country's cultural values while inviting global external global trends.
tourists.
Asia-Pacific, Australia and New Zeeland to The new rules stipulate daily penalties for each
fighting money laundering efforts day of non-compliance post the 28-day
enrollment deadline. Furthermore, entities are
Australian Financial Entities Urged to Comply obligated to enroll even after this period has
with AUSTRAC Enrollment Requirements lapsed, as long as they continue to offer
designated services.
The Australian Transaction Reports and Analysis
Centre (AUSTRAC) has issued a stern reminder Broader Implications of the Amendments
to businesses in the financial, gambling, and
bullion sectors, emphasizing the urgency of In addition to introducing steeper
enrolling with the regulatory body by November non-enrollment penalties, the amendments
9, 2023. Failure to comply could result in empower the AUSTRAC CEO to utilize
substantial financial penalties, with unenrolled automated computer programs for regulatory
entities facing fines up to 60 penalty units per control and decision-making. They also
day, each unit costing $313. reinforce the confidentiality protocols
surrounding sensitive AUSTRAC information,
For entities that neglect enrollment for an ensuring its protection in court or tribunal
entire year, the consequences are even more proceedings.
severe. Businesses could be liable for fines as
high as $1,370,940, while corporate groups face This move by AUSTRAC signals a strict approach
potential penalties of up to $6,854,700. towards ensuring compliance within the
Australian financial, gambling, and bullion
Who Needs to Enroll? sectors, aiming to fortify anti-money laundering
and counter-terrorism financing measures.
AUSTRAC mandates enrollment for entities Entities operating in these sectors are advised
providing designated services with a connection to prioritize enrollment to avoid hefty penalties
to Australia. The spectrum of services requiring and contribute to the broader effort of
registration is broad, encompassing various maintaining financial security and integrity
sectors such as account and deposit-taking within Australia.
services, remittance, digital currency exchanges,
and even gaming machines. A detailed list of Key takeaways
these services is available in Section 6 of the
Anti-Money Laundering and Counter-Terrorism Strict Enrollment Deadline: Australian banks
Financing Act 2006 (AML/CTF Act). must enroll with AUSTRAC by November 9,
2023, to avoid penalties. This deadline is critical
Legislative Changes Leading to Stringent and non-negotiable.
Penalties
Significant Daily Penalties: Post-deadline, banks
The increased penalties are a result of will incur substantial fines for each day they
amendments to Section 51B of the AML/CTF remain unenrolled. The fine is set at 60 penalty
Act, following the passage of the Crimes and units per day, with each unit costing $313.
Other Legislation Amendment (Omnibus) Bill
2023 in September 2023. These amendments, Annual Penalty Accumulation: If a bank remains
effective from November 9, aim to reinforce civil unenrolled for a full year, it faces a severe
penalty provisions for entities that delay or financial penalty, potentially reaching
avoid AUSTRAC enrollment. $1,370,940 for individual entities and up to
$6,854,700 for corporate groups.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Overview of the Australian Anti-Money Record Keeping: Obligatory retention of records

Laundering (AML) Framework relating to customer identification, transactions,
and AML/CTF program documentation.
The Australian Anti-Money Laundering (AML)
framework is a comprehensive set of laws, AML/CTF Programs: Institutions must develop
and maintain an AML/CTF program tailored to
regulations, and compliance requirements their risk profile, including employee training,
designed to prevent and detect money internal policies, procedures, and audits.
laundering and terrorism financing activities. It
is anchored in the Anti-Money Laundering and Recent Amendments and Updates
Counter-Terrorism Financing Act 2006
(AML/CTF Act) and overseen by the Australian Enhanced Penalties: Amendments to the
Transaction Reports and Analysis Centre AML/CTF Act have increased penalties for
non-compliance, including daily fines for
(AUSTRAC). entities failing to enroll with AUSTRAC.
Key Legislation Automated Decision-Making: Authorization for
AUSTRAC to use automated programs for
Anti-Money Laundering and Counter-Terrorism regulatory control.
Financing Act 2006 (AML/CTF Act): Central
legislation that establishes the legal framework Data Protection: Strengthened measures to
for AML and CTF in Australia. safeguard sensitive AUSTRAC information in
legal proceedings.
Financial Transaction Reports Act 1988 (FTR
Act): Mandates reporting and record-keeping of Key Challenges and Focus Areas
cash transactions over a specified threshold. Emerging Technologies: Adapting to
advancements like cryptocurrencies and digital
Regulatory Authority banking.
AUSTRAC: The primary regulatory body International Cooperation: Collaborating with
responsible for monitoring and ensuring global partners to tackle cross-border money
compliance with the AML/CTF Act. AUSTRAC laundering and terrorism financing.
collects, analyses, and disseminates financial
intelligence to law enforcement and national Risk Management: Continuously assessing and
security agencies. updating risk profiles and compliance strategies
in response to evolving threats.
Compliance Obligations for Entities The Australian AML framework is a robust and
evolving system, essential for maintaining the
Enrollment and Reporting: Financial integrity of the financial system and protecting
institutions, gambling entities, and other it from criminal misuse. Entities operating
businesses providing designated services must within its scope must adhere to strict
enroll with AUSTRAC and report suspicious compliance standards, and ongoing vigilance is
activities and transactions. required to keep pace with emerging threats
and regulatory changes.
Customer Due Diligence: Entities must identify
and verify their customers' identities and
conduct ongoing due diligence.
Introduction : sustainable economy, financial stability
and geopolitical tensions

AUSTRAC New High-Risk Customers Guidelines Advantages of Tailored Risk Assessments

After conducting a consultation in December Implementing regular, tailored enterprise-wide

2022, the Australian Transaction Reports and risk assessments enables firms to focus on
Analysis Centre (AUSTRAC) has introduced new actual risks pertinent to their operations, rather
than unnecessary areas. Such assessments help
guidelines aimed at enhancing compliance and firms to define their risk appetite and respond
reporting strategies for dealing with high-risk to risks in a targeted manner, thus avoiding the
customers. This move is intended to mitigate need for debanking entire categories of clients.
the practice of debanking, which often targets This approach fosters more sustainable and
entities such as fintechs, remittance providers, mutually beneficial business relationships with
and digital currency exchanges that are legitimate customers in higher-risk sectors.
perceived as high-risk or non-traditional.
Key takeaways for Australian banks
The key focus of this guidance is to promote 1.New Guidelines to Address Debanking:
thorough risk assessments while assuring firms AUSTRAC has released guidelines following its
that implementing effective anti-money December 2022 consultation to address the
laundering and counter-terrorist financing issue of debanking, especially targeting sectors
(AML/CTF) measures does not necessitate like fintechs, remittance providers, and digital
debanking. AUSTRAC emphasizes that currency exchanges considered high-risk.
debanking could potentially weaken a firm's
AML/CTF strategy. Prior to this, the Australian 2.Encouragement of Sound Risk Assessments:
The guidance emphasizes the importance of
Senate had reported on the adverse effects of conducting thorough risk assessments. It
debanking on specific Australian entities, reassures firms that effective anti-money
echoing the Financial Action Task Force’s (FATF) laundering and counter-terrorist financing
concerns over the ethical implications of (AML/CTF) practices are achievable without
debanking certain customer groups. resorting to debanking.

Objectives of the New Guidance 3.Negative Impact of Debanking: AUSTRAC

points out that debanking may undermine
Clarification of AML Procedures: The guidance effective AML/CTF approaches and can lead to
aims to provide clarity on appropriate increased risks in money laundering and
terrorist financing.
risk-based AML procedures for financial
institutions, reassuring them of the feasibility of 4.Clarification on AML Procedures: The
servicing high-risk businesses. It outlines guidelines aim to clarify appropriate risk-based
AUSTRAC’s expectations in managing these risks AML procedures for financial institutions. This
and offers support for conducting effective risk includes managing risks in high-risk business
management in high-risk business relationships. relationships and supporting firms in conducting
proper risk management.
Informing High-Risk Business Clients: The
guidance also intends to educate potential 5.Education for High-Risk Clients: High-risk
business clients are informed about the
business clients in high-risk sectors about the necessary compliance information required for
necessary information they must provide for a maintaining a business relationship.
compliant business relationship.
6.Distinction Between Risk-Based and Zero-Risk
Risk Management Approaches Approaches: AUSTRAC highlights the difference
between a realistic risk-based approach and an
Risk-Based vs. Zero-Risk: AUSTRAC distinguishes unattainable zero-risk approach, advising firms
between a genuine risk-based approach and the to focus on reasonable risk control measures.
unattainable concept of “zero-risk”. Firms are
encouraged to focus on reasonable precautions 7.Varied Risk Profiles Within High-Risk Sectors:
The guidelines acknowledge that risk levels vary
and due diligence in risk control, rather than significantly even within high-risk sectors and
pursuing an unachievable zero-risk objective. that a blanket approach to debanking is not
effective.
Varied Risk Profiles: The guidance highlights
that risks vary significantly between customers, 8.Senate’s Observations on Debanking
even within high-risk sectors. A blanket Consequences: The Australian Senate has noted
approach to exclude high-risk clients can that debanking can limit access to important
paradoxically increase the risk of money financial data, encourage less regulated
laundering and terrorist financing and activities, lead to underground activities, and
reduce the effectiveness of law enforcement
negatively impact legitimate businesses. and intelligence work.
Senate’s Observations: The Australian Senate 9.Benefits of Tailored Risk Assessments:
noted that debanking can limit historical data Regular, tailored risk assessments are advocated
availability, drive unregulated activities like cash to help firms identify and focus on actual risks
transactions, lead to more underground relevant to their operations, avoiding
activities, and restrict AUSTRAC’s access to unnecessary debanking of entire client
crucial financial reports, thereby impacting the categories.
effectiveness of law enforcement and 10.Fostering Sustainable Business Relationships:
intelligence communities. The guidance suggests that understanding and
managing risks effectively can lead to
sustainable and mutually beneficial
relationships with legitimate clients in
higher-risk sectors.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Overview of the New Zealand Anti-Money Reporting: Obligation to report suspicious

Laundering (AML) Framework transactions, large cash transactions, and
international funds transfers to the Financial
The New Zealand Anti-Money Laundering (AML) Intelligence Unit (FIU) within the New Zealand
framework is a set of laws and regulations Police.
designed to prevent money laundering and AML/CFT Program: Entities must establish,
financing of terrorism. It is primarily governed implement, and maintain an AML/CFT program
by the Anti-Money Laundering and Countering that includes risk assessments, compliance
Financing of Terrorism Act 2009 (AML/CFT Act) policies, and employee training.
and is enforced by various regulatory bodies.
Recent Developments and Updates
Key Legislation
Enhanced Due Diligence: Increased focus on
Anti-Money Laundering and Countering high-risk customers and politically exposed
Financing of Terrorism Act 2009 (AML/CFT Act): persons (PEPs).
The primary legislation which sets out the Expanded Scope: Inclusion of more sectors like
obligations for financial institutions and other virtual asset service providers and high-value
entities. goods dealers.
Financial Transactions Reporting Act 1996: Increased Supervision and Enforcement:
Requires reporting of suspicious transactions Enhanced efforts by regulatory bodies to
and large cash transactions. monitor compliance and enforce the AML/CFT
regulations.
Regulatory Authorities
Challenges and Areas of Focus
The Financial Markets Authority (FMA): Adapting to Emerging Technologies: Keeping
Oversees securities, financial reporting, and pace with the evolving nature of financial
company law compliance. crimes, especially with the rise of
cryptocurrencies and digital banking.
The Reserve Bank of New Zealand: Regulates
banks, life insurers, and non-bank deposit International Cooperation: Working in tandem
takers. with global AML/CFT efforts to tackle
cross-border financial crimes.
Department of Internal Affairs: Monitors a wide
range of sectors including casinos, money Risk Management and Compliance:
Continuously updating risk assessment and
service businesses, and trust and company compliance strategies to effectively counter
service providers. AML/CFT threats.
Compliance Obligations New Zealand’s AML framework is a dynamic and
evolving system aimed at protecting its financial
Customer Due Diligence (CDD): Entities must systems from misuse for money laundering and
identify and verify their customers' identities, terrorist financing. Entities subject to these
understand the nature of their business, and regulations must adhere to stringent
monitor accounts for suspicious activities. compliance standards and maintain constant
vigilance to adapt to emerging threats and
Record Keeping: Entities are required to keep regulatory changes.
records of CDD, account files, business
correspondence, and transactions.
Singapore's MAS Explores AI in Anti-Money Use of natural language processing (NLP) for
Laundering Efforts: Key Takeaways for Banks efficient analysis of texts and social media,
aiding in supervision and enforcement actions.
In a recent interview with CNA, Ravi Menon, the
managing director of the Monetary Authority of Key Takeaways for Bank Compliance Teams
Singapore (MAS), emphasized the potential of
artificial intelligence (AI) in enhancing Stay Informed: Compliance staff should stay
anti-money laundering (AML) efforts. This abreast of technological advancements, such as
initiative aligns with MAS's commitment to those discussed at the Singapore FinTech
leveraging technology in financial oversight. Festival, to understand the evolving regulatory
landscape.
AI Integration in Money Laundering
Surveillance Engagement with AI and Machine Learning:
Understanding and implementing AI and
Menon pointed out the necessity of machine learning in compliance strategies is
strengthening big-picture surveillance in light of becoming increasingly important.
a recent billion-dollar money laundering case.
MAS is already employing machine learning and Adherence to MAS’ FEAT Principles: MAS’s
advanced data analytics for fraud detection and Fairness, Ethics, Accountability, and
is now looking to integrate AI more Transparency (FEAT) principles provide guidance
comprehensively. for responsible AI use in financial services.

Application to COSMIC AI Overlay Solutions: For banks not ready for a

complete technology overhaul, AI overlay
A significant development is the integration of solutions can integrate with existing systems to
AI into COSMIC (Collaborative Sharing of Money enhance risk identification and management.
Laundering/Terrorism Financing Information
and Cases), set to launch in the second half of The MAS’s focus on AI and machine learning in
2024. This digital platform aims to facilitate AML efforts signifies a shift towards more
information sharing among financial institutions technologically advanced regulatory practices.
(FIs) about suspicious transactions, with AI Banks in Singapore are encouraged to adopt and
providing additional insights for a more adapt to these technological changes to
comprehensive risk analysis. enhance their AML compliance and operational
efficiency.
AI in MAS’s Supervision of FIs
Lawrence Wong, Chairman of MAS, highlighted
several benefits of AI in supervisory roles during
a parliamentary session:
Enhanced risk signal detection in large data sets.
Automation of manual tasks for efficiency and
accuracy.
Improved identification of outliers and
suspicious networks.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Singapore's MAS Proposes New AML Rules for Notification and Reporting Obligations
Single-Family Offices
Newly exempted SFOs would need to notify
The Monetary Authority of Singapore (MAS) is MAS within seven days of commencement,
in the process of implementing a new providing legal declarations and signed
statements from family members and owners.
regulatory framework aimed at closing They would also be subject to annual reporting
Anti-Money Laundering (AML) loopholes for requirements, enhancing transparency and
single-family offices (SFOs). This initiative comes accountability.
with the rising popularity of SFOs in Singapore
and the associated potential risks of money Seeking Feedback
laundering.
MAS released the consultation paper on this
Proposed Licensing Exemption Criteria for SFOs framework on July 31, 2022, and is inviting
feedback from interested parties until
Under the proposed rule, to qualify for an September 30, 2023. This feedback will help
assess the benefits and risks of the proposed
exemption from obtaining a capital markets revisions.
services (CMS) license under the Securities and
Futures Act (SFA), SFOs must meet specific The MAS's move to standardize and tighten
family-owned criteria and adhere to uniform AML regulations for SFOs reflects its
AML/Counter-Financing of Terrorism (CFT) commitment to safeguarding Singapore's
oversight measures. financial system from money laundering risks.
This proposed rule change signifies a significant
Background and Context shift in the regulatory landscape for wealth
management, particularly for family-owned
SFOs, which handle wealth management for financial entities.
individual families, have gained traction in Asia, Key Takeaways for Family Offices in Singapore
particularly due to the increase in wealth, from MAS's Proposed AML Rules
notably in China. These offices typically manage
large assets, including investments, vehicle Introduction of Standardized Criteria: The
purchases, and real estate. While traditionally Monetary Authority of Singapore (MAS) is
exempt from stringent AML regulations due to proposing new rules to standardize the licensing
their family-owned or controlled nature, MAS exemption criteria for Single-Family Offices
(SFOs), focusing on ensuring they are
has recognized the need for more robust family-owned and subject to consistent
oversight in this sector. AML/CFT oversight.
Current Exemption Process Enhanced AML/CFT Oversight: SFOs will be
required to adhere to more stringent
At present, SFOs meeting certain criteria are Anti-Money Laundering and Counter-Financing
automatically exempt from MAS licensing or of Terrorism measures to qualify for exemption
AML regulation, provided they submit a legal from obtaining a capital markets services license
opinion confirming their eligibility. However, under the Securities and Futures Act.
this process lacks a standardized definition of
Need for Legal Declaration and Compliance:
SFOs, leading to case-by-case exemptions. Under the new framework, SFOs will need to
declare their exemption status to MAS within
MAS's Proposed Framework for SFOs seven days of operation. This declaration must
include legal documentation and signed
The new proposal by MAS seeks to standardize statements from all family members and
the exemption criteria for SFOs, ensuring a owners.
consistent and streamlined process. Key
requirements under the proposed changes Mandatory Business Relationship with
include: MAS-Regulated Firms: To remain exempt, SFOs
must maintain a business relationship with a
Ownership: The SFO must be family-owned, firm regulated by MAS, thereby indirectly
including connected trusts and organizations. coming under the MAS AML/CFT oversight.
Annual Reporting Requirements: Exempted
Fund Management: Management of funds SFOs will be subjected to annual reporting
should be limited to the family and key obligations, increasing the transparency and
employees. accountability of their financial activities.
Incorporation and Operation: The SFO should Incorporation and Operation Criteria: Qualifying
be incorporated in Singapore, with a SFOs must be incorporated in Singapore and
Singapore-based employee designated as the appoint a locally-based employee as the point
MAS contact point. of contact for MAS.

Business Relationship: SFOs must maintain a Implications of Increased Scrutiny: The

proposed rules indicate that MAS is paying
business relationship with an MAS-regulated closer attention to the activities of SFOs,
firm, bringing them under indirect MAS highlighting the need for these entities to be
AML/CFT oversight. more vigilant about their compliance practices.
Introduction : sustainable economy, financial stability
and geopolitical tensions

Overview of Singapore's Anti-Money Transaction Monitoring: Banks must monitor

Laundering (AML) Framework for Banks customer transactions to identify suspicious
patterns that could indicate money laundering
Singapore’s Anti-Money Laundering (AML) or terrorist financing.
framework is a comprehensive set of
Record Keeping: Financial institutions must
regulations and guidelines specifically designed maintain comprehensive records of customer
to prevent money laundering and terrorism identities, account information, and transaction
financing in the banking sector. This framework details for a minimum period.
is overseen by the Monetary Authority of
Singapore (MAS), the nation's central bank and Reporting Obligations: Banks are mandated to
financial regulatory authority. report suspicious transactions to the Suspicious
Transaction Reporting Office (STRO) under the
Key Legislation and Regulations Commercial Affairs Department of the
Singapore Police Force.
Anti-Money Laundering and Countering the
Risk Management and Compliance Programs:
Financing of Terrorism (AML/CFT) Regulations: Banks need to establish and maintain an
These regulations are a cornerstone of effective AML/CFT program, including policies,
Singapore's AML framework, requiring banks to procedures, and controls that reflect their risk
implement robust measures to detect and profile and the nature of their operations.
prevent illicit money flows.
Recent Developments and Challenges
Corruption, Drug Trafficking and Other Serious
Crimes (Confiscation of Benefits) Act (CDSA): Enhanced Focus on Technology: MAS
encourages banks to adopt advanced
This act provides the legal basis for the technologies like AI and machine learning for
confiscation of proceeds from drug trafficking effective AML/CFT compliance.
and other serious crimes, including provisions
related to money laundering. Global and Regional Cooperation: Singapore
actively participates in international and
Terrorism (Suppression of Financing) Act: regional AML bodies, like the Financial Action
Focuses on the prevention and suppression of Task Force (FATF), to align its framework with
the financing of terrorism activities. global standards.

Regulatory Authority Adapting to Evolving Threats: Banks in

Singapore must continuously adapt to changing
Monetary Authority of Singapore (MAS): MAS money laundering and terrorism financing
tactics, including the challenges posed by
plays a pivotal role in developing and enforcing cryptocurrencies and online transactions.
AML/CFT regulations for banks in Singapore. It
issues guidelines, conducts supervisory and Singapore’s AML framework for banks
enforcement actions, and ensures that banks represents a robust and dynamic system
comply with international standards. designed to safeguard the integrity of the
banking sector against illicit financial activities.
Compliance Obligations for Banks Banks operating in Singapore must adhere to
strict compliance standards and be vigilant in
Customer Due Diligence (CDD): Banks are updating their practices to keep pace with
required to perform CDD to verify the identity evolving threats and regulatory advancements.
of their customers, understand their business
and financial activities, and assess the risk they
pose.
Singapore's Anti-Bribery Efforts Since 2010 Public Sector Integrity
Since 2010, Singapore has reinforced its stance Stringent Codes of Conduct: Continuous
against bribery and corruption through various emphasis on high ethical standards and integrity
legislative updates, enforcement actions, and among public officers.
international cooperation efforts. As a global
financial hub with a strong reputation for Regular Audits and Controls: Implementation of
integrity and transparency, these efforts are rigorous audit processes and control
crucial in maintaining the nation's economic and mechanisms within public sector organizations
political stability. to prevent corrupt practices.

Legislative Framework Private Sector Engagement

Prevention of Corruption Act (PCA): The Corporate Governance Standards: Promotion of

cornerstone of Singapore’s anti-bribery efforts, strong corporate governance and ethical
the PCA has been actively enforced to deter business practices in the private sector.
corruption in both the public and private
sectors. Awareness and Training: Regular campaigns and
training programs for companies to recognize
Enhancements to PCA: Amendments and and prevent bribery and corruption in business
updates have been made to strengthen the act, dealings.
including increasing penalties for corruption
offenses. Public Awareness and Education

Institutional Mechanisms Anti-Corruption Campaigns: Initiatives to

increase public awareness about the
Corrupt Practices Investigation Bureau (CPIB): detrimental effects of corruption and the
The CPIB remains central to Singapore's importance of reporting corrupt practices.
anti-bribery framework, with a mandate to
investigate and prevent corruption practices in Educational Programs: Integration of
the country. anti-corruption topics in educational curricula
and organizing seminars and workshops to
Enhanced Capabilities: The CPIB has been foster a culture of integrity.
consistently strengthening its investigative
capabilities and resources to tackle complex Technological Advancements
cases, including transnational corruption.
Use of Technology in Enforcement: Adoption of
International Cooperation advanced technologies in investigation
processes, data analysis, and surveillance to
United Nations Convention against Corruption enhance the effectiveness of anti-bribery
(UNCAC): Singapore’s ratification and active measures.
participation in UNCAC demonstrates its
commitment to global standards in Challenges and Future Directions
anti-corruption.
Adapting to New Risks: Addressing emerging
Cross-Border Collaborations: Enhanced risks such as digital corruption and bribery in
cooperation with international law enforcement cyberspace.
agencies and regulatory bodies to combat
Globalization and Economic Changes:
transnational bribery and corruption cases.
Navigating challenges brought about by
increased cross-border business activities and
complex financial transactions.
Hong Kong Anti-Money Laundering Framework Compliance Obligations for Financial
Institutions
Hong Kong, as an international financial center,
has developed a comprehensive Anti-Money Customer Due Diligence (CDD) and Record
Laundering (AML) framework to combat money Keeping: Institutions must identify and verify
their customers’ identities, understand the
laundering and terrorist financing. This nature of their business, and keep records for a
framework aligns with international standards, specified period.
particularly those set by the Financial Action
Task Force (FATF). Suspicious Transaction Reporting: Obligation to
report any suspicious transactions to the JFIU.
Key Legislation and Regulations
Risk-Based Approach: Institutions are required
Anti-Money Laundering and Counter-Terrorist to assess the risks of money laundering and
Financing Ordinance (AMLO): The principal terrorist financing and implement controls
legislation providing the legal foundation for proportionate to those risks.
AML and counter-terrorist financing (CFT) AML/CFT Programs: Development and
measures in Hong Kong. implementation of internal policies, procedures,
and controls to combat money laundering and
Drug Trafficking (Recovery of Proceeds) terrorist financing.
Ordinance: Focuses on the confiscation of
proceeds derived from drug trafficking. Recent Developments

Organized and Serious Crimes Ordinance Enhanced Due Diligence: Focus on politically
(OSCO): Targets proceeds from organized and exposed persons (PEPs) and higher-risk
situations.
serious crimes, including money laundering
provisions. Increased Supervision and Penalties:
Strengthened regulatory oversight with higher
United Nations (Anti-Terrorism Measures) penalties for non-compliance.
Ordinance (UNATMO): Addresses the financing
of terrorism. Global Cooperation: Active participation in
international AML forums and initiatives.
Regulatory Authorities
Challenges and Focus Areas
The Financial Services and the Treasury Bureau
(FSTB): Oversees policy formulation and Adapting to New Technologies: Addressing risks
related to digital currencies and online financial
legislative development for AML/CFT. services.
The Joint Financial Intelligence Unit (JFIU): Cross-Border Transactions: Managing the
Operates as a central unit for the receipt, complexities of international financial flows and
analysis, and dissemination of suspicious cooperation with overseas regulators.
transaction reports.
Continual Updates to Regulatory Framework:
Various Regulatory Bodies: Different sectors are Regularly updating AML laws and guidelines to
supervised by respective regulatory bodies like keep pace with evolving financial crime tactics
the Hong Kong Monetary Authority (HKMA) for and international standards.
banks, the Securities and Futures Commission Hong Kong's AML framework is a dynamic and
(SFC) for securities and futures, the Insurance evolving system designed to protect its financial
Authority for insurance companies, and the systems from being exploited for money
Customs and Excise Department for money laundering and terrorist financing.
service operators.
Hong Kong Monetary Authority Initiates e-HKD CBDC Expert Group Formation
Pilot Program for Retail CBDC
HKMA plans to establish a CBDC Expert Group
The Hong Kong Monetary Authority (HKMA) is to enhance “government-industry-academia”
advancing its exploration into the realm of collaboration. This group, comprising esteemed
digital currencies with the recent launch of a academics from various fields, will delve into
pilot program for a retail central bank digital critical aspects such as privacy protection,
currency (CBDC), named e-HKD. This initiative, cybersecurity, interoperability, performance,
announced on May 18, 2023, involves scalability, compliance, operational robustness,
collaboration with 16 selected entities from and technology-enabled capabilities. These
finance, technology, and payments sectors. focus areas stem from the "problem
statements" identified during the 2021 CBDC
Background of HKMA’s CBDC Research consultation.
HKMA's journey into CBDC began with Project Compliance and Privacy Considerations
LionRock in 2017, focusing on wholesale CBDC.
This project evolved into Project e-HKD in June The HKMA acknowledges the need to balance
2021, shifting the emphasis to retail or privacy with traceability and AML/CFT
"general-purpose" CBDCs, aiming to explore compliance. It is considering a tiered privacy
broader applications in everyday financial approach, offering full anonymity for
transactions. small-value transactions and traceability for
larger ones, allowing a risk-based compliance
The e-HKD Pilot Programme approach while maintaining privacy.
The pilot program is a key component of Key Takeaways for Compliance Staff and Firms
HKMA's three-rail strategy for potential e-HKD
implementation. This strategy includes: Stay Informed: Compliance professionals should
keep abreast of developments from the e-HKD
Rail 1: Establishing the legal and technical pilot program and share insights with their
framework for e-HKD. teams.
Rail 2: This current pilot phase explores specific Monitor Regional CBDC Developments:
applications and designs of CBDC across six Observing CBDC projects like Singapore’s Project
categories such as full-fledged and Ubin and Australia’s Project Atom can offer
programmable payments, offline and tokenized valuable insights.
payments, deposits, and settlement of Web3
transactions and tokenized assets. Infrastructure Preparedness: Firms should
consider developing API-enabled systems to
Rail 3: The potential future rollout of e-HKD. seamlessly integrate new payment rails and
adapt to industry advancements in CBDC.
HKMA's Collaboration and Research Approach
The HKMA's foray into the e-HKD pilot program
Eddie Yue, the Chief Executive of HKMA, marks a significant step in Hong Kong's journey
emphasized the exploratory nature of the pilot towards embracing digital currency. While the
program, acknowledging that a decision on full implementation of e-HKD remains under
e-HKD's introduction is pending. Results from consideration, the ongoing pilot and research
this first pilot will be publicized at Hong Kong efforts underline HKMA's commitment to
FinTech Week 2023, slated for October 30 to staying at the forefront of financial technology
November 5. innovation and readiness for future financial
landscapes.
Hong Kong Monetary Authority Encourages This move, aligning with FATF Recommendation
Banks to Service Virtual Asset Service 15, mandates VASPs to comply with AML/CFT
Providers regulations. Under the new regime, VASPs must:

The Hong Kong Monetary Authority (HKMA) has Obtain a license from the Securities and Futures
Commission (SFC).
issued new guidance to banks, advocating for
the provision of banking services to licensed Fulfill the “fit and proper test”.
virtual asset service providers (VASPs). This
initiative is part of Hong Kong’s strategy to Adhere to AML/CTF obligations, including CDD
establish itself as a leading crypto hub and is and record-keeping.
aligned with the upcoming VASP licensing
regime set to start in June 2023. Regularly submit financial information and
appoint responsible officers for AML/CTF
compliance.
Promoting Inclusive Banking Services
Preparation for VASPs
The HKMA emphasizes a progressive approach
for authorized institutions (AIs), urging them to The HKMA has shifted the commencement date
avoid a blanket de-risking strategy that might of the new regime to June 1, 2023, allowing
inadvertently exclude emerging industries or more preparation time for VASPs. The regime’s
specific nationalities. Banks are encouraged to launch will enable trading of major tokens like
offer fair access to services for legitimate Bitcoin and Ether for retail investors in Hong
businesses, balancing risk understanding with a Kong. ZA Bank Ltd., a major virtual bank, plans
to provide token-to-fiat currency conversion
risk-based response. This approach includes services.
equipping staff with the necessary training and
updated information to effectively support the Key Takeaways for Compliance Teams
digital asset sector.
Compliance staff are advised to review the
Action Points for Authorized Institutions HKMA’s circular thoroughly, focusing on the
annex that outlines observations and best
The HKMA outlines several key measures for practices for onboarding corporate customers.
AIs: Key standards highlighted include:

Reviewing Account Opening and CDD Setting guidelines to ensure prompt and
appropriate processing of customer
Procedures: AIs are advised to reassess their applications.
account opening processes and customer due
diligence measures. Keeping applicants informed about application
timelines and any delays.
Supporting Financial Inclusion: Banks are
encouraged to participate in the Tiered Account Limiting additional CDD measures to
Services initiative and offer "Simple Bank correspondent services with international
Accounts" tailored for SMEs and start-ups VASPs, excluding the need for extra CDD for
SFC-licensed VASPs.
requiring basic banking services.
Conducting nuanced customer risk assessments
Hong Kong’s VASP Licensing Scheme rather than automatically applying enhanced
due diligence for customers from FATF
With the amendment to the Anti-Money grey-listed jurisdictions.
Laundering and Counter-Terrorist Financing
Ordinance (AMLO) in December 2022, Hong
Kong is introducing a licensing regime for
VASPs.
What to expect from leaders in 2024 ?
This section is dedicated to delineating the essential attributes necessary for the
establishment of a sound and potent compliance program, pivotal for nurturing an
organization's resilience. For Chief Compliance Officers (CCOs) assuming their roles
anew, the clock is ticking from day one to set the groundwork for a successful tenure.
The complexity of a CCO's role has escalated, confronted with an ever-shifting risk
landscape, increased fragmentation across regulatory environments, more stringent
directives from regulatory bodies, and the imperative to instill greater organizational
resilience. Furthermore, they are responsible for maintaining the momentum of
existing compliance programs to facilitate a seamless transition.

Transitioning into the role of a CCO is often a formidable journey, marked by steep
learning curves, particularly for those with limited prior experience. Many attempt to
institute new compliance frameworks from scratch, only to face setbacks in the initial
months due to a lack of essential resources and information. It's crucial for these new
leaders to rapidly assimilate the qualities that define effective CCOs, understand the
organizational groundwork necessary for a robust compliance infrastructure, and stay
abreast of contemporary issues that they will introduce to the board in 2024.

From Compliance Officer to Team Leader in Foster Team Growth and Development
2024
Mentorship: Be willing to mentor and guide less
Becoming a team leader in a compliance experienced compliance officers, helping them
environment within a bank involves a develop their skills and knowledge.
combination of soft skills development, deep
understanding of regulatory frameworks, and
the ability to manage both projects and people Team Building: Cultivate a collaborative
effectively. Here’s how a compliance officer can environment that encourages sharing best
transition to a team leader role: practices and learning from one another.

Develop Leadership Skills Show Organizational Commitment

Communication: Hone your ability to clearly Professional Development: Pursue additional
articulate complex regulations and compliance certifications or training in compliance and
requirements to team members of varying leadership to show your commitment to the
levels of expertise. Effective communication field.
also means being a good listener, open to
feedback and able to facilitate open dialogue Organizational Understanding: Learn about
among team members.
other departments within the bank.
Vision and Strategy: Cultivate a clear vision of Understanding the roles and challenges of other
your team's role in the broader context of the teams can enhance inter-departmental
bank's objectives. Be able to set strategic goals cooperation and compliance integration.
and align your team’s work with the bank's
mission and compliance standards. Exhibit Personal Attributes
Decision-Making: Enhance your Integrity: Display a high degree of integrity and
decision-making skills. A team leader must ethical behavior, as compliance is fundamentally
make informed choices that balance regulatory about adhering to standards and doing the right
requirements with the bank's business
interests. thing.

Expand Compliance Expertise Resilience: Be resilient and adaptable to change,

as the regulatory landscape is constantly
Regulatory Knowledge: Stay updated on current evolving.
and emerging regulations. A leader is often
looked upon for expert guidance when Engage with Senior Management
interpreting and implementing regulatory
changes. Management Interaction: Interact with senior
management effectively, providing clear and
Risk Management: Develop a thorough concise compliance updates and strategic
understanding of risk management principles
and how they apply to the bank’s operations. Be insights.
proactive in identifying potential compliance
risks. Advocacy: Advocate for the resources and tools
your team needs to succeed, and for the
Demonstrate Operational Excellence importance of compliance within the bank.
Process Improvement: Show that you can Take Initiative
streamline compliance processes for efficiency
without compromising on rigor. Automation Lead by Example: Before being promoted to a
and technology can be key allies here. leadership role, take on the role of a leader
Project Management: Manage projects within your current capacity. This could mean
effectively, demonstrating that you can lead volunteering to lead projects or offering to
initiatives that enhance the bank's compliance tackle challenging compliance issues.
posture.
Networking: Build a network both within and
outside the bank. This can provide you with a
broader perspective on compliance issues and
leadership.
Evaluation process for a Compliance Officer Performance Metrics
revealed by former Compliance Officers
1.Compliance Metrics: The extent to which
When evaluating a compliance officer stepping compliance metrics (e.g., number of incidents,
into a managerial role, the evaluation grid timely reporting, etc.) are met or exceeded.
should encompass a range of competencies 2.Audit Results: Outcomes of internal and
that are essential for effective leadership in external audits concerning the compliance
compliance. Here’s a structured approach to the department.
evaluation:
Interpersonal Skills
Technical Expertise
1.Team Building: Ability to create a cohesive and
1.Regulatory Knowledge: Understanding of high-performing team.
relevant laws, regulations, and industry
2.Adaptability: Capacity to adapt to regulatory
standards. changes and organizational shifts.
2.Policy Implementation: Ability to interpret 3.Professionalism: Consistent demonstration of
and implement compliance policies within the integrity and ethical standards.
team.
Training and Development
3.Risk Assessment: Proficiency in identifying,
assessing, and mitigating compliance risks. 1.Continuous Learning: Commitment to keeping
up-to-date with compliance trends and
Management and Leadership Skills professional development.

1.Strategic Thinking: Capability to align 2.Training Delivery: Effectiveness in delivering

compliance training to the team.
compliance goals with the bank's strategic
objectives. Innovation and Proactivity
2.Decision Making: Effectiveness in making 1.Initiative: Instances where the manager
informed and timely decisions. proactively addressed potential compliance
issues.
3.Team Development: Success in mentoring
team members and fostering their professional 2.Creative Solutions: Ability to develop
growth. innovative solutions to compliance challenges.

4.Conflict Resolution: Skill in managing and Compliance Culture

resolving conflicts within the team or with other 1.Culture Promotion: Efforts made to promote a
departments. culture of compliance within the team and
organization.
Communication
2.Stakeholder Engagement: Success in engaging
1.Clarity: The ability to communicate complex with various stakeholders to ensure a
compliance issues clearly and succinctly. comprehensive understanding of compliance
throughout the organization.
2.Influence: Effectiveness in persuading and
gaining buy-in from team members and Personal Development
stakeholders. 1.Self-Evaluation: Openness to feedback and
willingness to engage in self-improvement.
3.Reporting: Competence in reporting
compliance matters to senior management and 2.Leadership Development: Active participation
external regulators when necessary. in leadership development opportunities or
training.
Organizational Skills
For each of these categories, specific indicators
1.Project Management: Efficiency in leading and of performance can be developed, and the
managing compliance-related projects. compliance officer as a manager can be rated
on a scale (for example, 1 to 5 or
2.Time Management: Ability to prioritize tasks "unsatisfactory" to "excellent"). This evaluation
and manage time effectively. should be done periodically, and it should
involve both self-assessment and feedback from
3.Process Improvement: Initiative shown in superiors, peers, and direct reports to get a
streamlining or improving compliance comprehensive view of the manager's
processes. performance.
Build a successful Compliance Program as Monitoring and Independent Testing
newly appointed CCO
Monitoring and independent testing are the
In the complex financial landscape of the United dual pillars that support the compliance
States, a bank’s adherence to compliance structure. Continuous monitoring of the bank's
regulations is not just a legal requirement but a adherence to policies, coupled with
cornerstone of its operational integrity. Chief independent audits, ensures that the
Compliance Officers (CCOs) bear the critical compliance program remains effective and any
responsibility of developing, implementing, and gaps are promptly addressed.
maintaining a compliance program that ensures
the bank's resilience against regulatory risks. Reporting and Communication
Here’s a blueprint for CCOs to build a successful
compliance program. Effective reporting mechanisms are vital for
transparency in the compliance process. Regular
Understanding the Regulatory Environment reports to the board and senior management
keep the leadership informed and engaged with
A thorough comprehension of the regulatory the compliance efforts. Moreover, clear
environment is the bedrock of an effective channels should be established for employees
compliance program. U.S. banks must navigate a to report potential compliance issues, ensuring
myriad of federal and state regulations, that any concerns can be addressed
including the Bank Secrecy Act (BSA), the USA confidentially and promptly.
PATRIOT Act, and the Dodd-Frank Act.
Additionally, international regulations such as Responding to Compliance Issues
the FATF recommendations and the GDPR may
also come into play for globally operating banks. Identifying and resolving compliance issues is a
dynamic aspect of the CCO’s role. Establishing a
Establishing a Compliance Framework system for documentation and resolution of
issues, and taking corrective actions when
The next step involves establishing a necessary, underlines the bank’s commitment to
comprehensive compliance framework. This compliance.
includes developing clear policies that reflect
the bank's commitment to ethical practices and Fostering a Culture of Compliance
legal compliance. Conducting risk assessments
is crucial to identify potential compliance risks, The success of a compliance program is largely
and subsequently, crafting detailed procedures dependent on the bank's culture. A 'tone at the
to mitigate these risks is necessary for top' that promotes ethical behavior and
safeguarding the bank's operations. compliance sets a precedent throughout the
organization. Engaging staff in the importance
Organizing the Compliance Team of compliance and encouraging ownership of
compliance responsibilities reinforces this
A specialized compliance team is the engine culture.
that drives the program. It’s imperative to staff
this team with professionals who possess the Reviewing and Adapting the Program
requisite expertise in compliance and risk
management. Equally important is providing In a regulatory landscape that is continually
ongoing training to ensure that the entire bank's evolving, a compliance program must be
staff is well-versed in compliance protocols. adaptable. Regular reviews and updates to the
program ensure that it remains current and
effective. Feedback from the compliance team,
employees, and external auditors is a valuable
resource for continuous improvement.
Leveraging Technology for Regulatory Preparing for Regulatory Examinations
Excellence: The CCO's Playbook for Banking
Compliance Preparation for regulatory examinations is a
critical component of a bank’s compliance
In the digital era, a Chief Compliance Officer program. Here's how technology can aid in this
preparation:
(CCO) in a banking institution must navigate a
complex web of regulations while ensuring Documentation and Record-Keeping
operational efficiency and readiness for
regulatory examinations. Leveraging technology Implement document management systems to
is not just an option; it's a strategic imperative maintain accurate and easily retrievable
that can transform the compliance landscape. compliance records. Utilize technology to
This article delves into how CCOs can harness ensure that all required documentation, from
customer due diligence records to transaction
the power of technology to elevate compliance histories, is complete and up-to-date.
practices and prepare for regulatory scrutiny.
Conduct simulated regulatory examinations
Embracing Digital Solutions using software that emulates the latest
examination checklists and procedures. Deploy
The adoption of advanced technological tools analytical tools to perform gap analyses
can significantly streamline compliance between current practices and regulatory
processes. Compliance officers are turning to standards. Stay informed with compliance
software solutions for transaction monitoring, management software that tracks regulatory
risk management, and compliance training. updates and changes, ensuring the bank is
never caught off-guard. Foster collaboration
These systems can process vast quantities of between compliance teams, internal audit, and
data with precision and speed, enabling CCOs to external consultants through secure platforms
detect potential non-compliance issues to share insights and examination strategies.
proactively.
Cybersecurity and Privacy
Automated Compliance Monitoring
Incorporating technology into compliance
Automated systems are adept at flagging practices also means prioritizing cybersecurity
unusual activities that may indicate money and data privacy. As banks collect and store
laundering or fraud. They work around the sensitive information, CCOs must ensure that
this data is protected against breaches, which is
clock, providing real-time alerts that allow for also a key component of regulatory compliance.
immediate action. This level of monitoring is
invaluable in maintaining constant vigilance For CCOs, technology is a potent ally in the
over transactional compliance. quest for regulatory compliance and
preparation for examinations. It provides the
Data Analytics and Reporting dual benefits of enhancing the efficiency and
accuracy of compliance operations and
Big Data analytics has revolutionized the way fostering a state of continual readiness for
banks analyze trends and report to regulatory regulatory scrutiny. By integrating these digital
bodies. By using sophisticated algorithms, banks tools into the compliance framework, CCOs not
can now predict risk patterns and compliance only set their banks up for success during
examinations but also contribute to the
failures before they materialize. Moreover, cultivation of a robust compliance culture within
automated reporting tools help in creating the institution. In the digital age, a
comprehensive reports that meet the exacting tech-empowered compliance program is the
standards of regulatory agencies. hallmark of a forward-looking bank, poised to
navigate the complexities of the regulatory
Risk Assessment and Management environment with confidence and agility.

CCOs can utilize technology to conduct and

update risk assessments systematically. These
tools provide a structured and repeatable
process that aligns with regulatory expectations
and the bank’s risk profile. Through predictive
analytics, banks can also anticipate areas of
regulatory focus and prepare accordingly.
Training and Development
E-learning platforms provide dynamic and
accessible compliance training to bank
employees. These platforms can be updated
swiftly to reflect the latest regulatory changes,
ensuring that all personnel are informed and
compliant with current laws and best practices.
Fostering Strategic Relationships with Leveraging Technology
Regulatory Bodies: A 2024 Roadmap for Banks
Banks can use technology to streamline
In the dynamic regulatory landscape of 2024, compliance processes, making it easier to
banks face the challenge of not just complying provide regulators with accurate and timely
information. Advanced analytics can also assist
with regulations but also engaging proactively banks in predictive compliance, identifying
with regulatory bodies. Establishing strategic potential issues before they become
relationships with these entities is more than a problematic, which regulators view favorably.
compliance requirement; it's a business
imperative that can lead to a deeper As we look towards the future of banking in
understanding of regulatory expectations, 2024 and beyond, the importance of strategic
influence policy development, and ensure relationships with regulatory bodies cannot be
overstated. By embracing a collaborative,
smoother operations. Here's how banks can transparent, and professional approach, banks
build and maintain these critical relationships. can navigate the complexities of regulation
more effectively. Such strategic relationships not
Engagement and Communication only facilitate a smoother compliance journey
but also contribute to the overall stability and
Regular and open communication is the credibility of the financial system. Banks that
bedrock of any strategic relationship. Banks invest in these relationships stand to gain a
should prioritize consistent dialogue with competitive edge, ensuring they are not just
regulators, providing updates on compliance compliant but also poised for growth in an
efforts and changes within the bank's ever-evolving regulatory environment.
operations. This two-way communication allows
Key takeaways
banks to gain insights into regulatory priorities
and concerns while affording regulators a clear 1.Regular Engagement: Maintain consistent and
view of the bank's commitment to compliance. open communication with regulatory bodies to
stay informed on expectations and convey the
Collaborative Approach to Compliance bank's compliance efforts.
Banks should seek opportunities to collaborate 2.Collaboration is Key: Seek collaborative
with regulatory bodies on various fronts, from opportunities with regulators, such as joint
joint workshops and training sessions to workshops or advisory committees, to influence
participation in advisory committees. Such policy development and demonstrate
commitment to regulatory compliance.
collaboration can help in shaping practical and
effective regulatory policies, as well as 3.Transparency Builds Trust: Be transparent in
demonstrate the bank's dedication to upholding reporting and disclosing issues to regulators,
the integrity of the financial system. which is essential for building a trusting
relationship.
Transparency and Trust
4.Preparation and Knowledge: Approach
Building trust with regulators involves interactions with regulators well-informed and
transparency in all dealings. This means timely prepared, with a deep understanding of current
reporting of compliance data, disclosing issues regulations and potential questions.
as they arise, and taking proactive steps to 5.Provide Constructive Feedback: Actively
address them. Trust is also built through the participate in industry forums and provide
demonstration of a strong internal culture of data-driven feedback on proposed regulations
compliance and ethics that resonates with the to establish the bank as a thought leader.
regulatory bodies’ expectations.
6.Professional Conduct: Engage with regulatory
bodies with professionalism and respect,
meeting deadlines and responding promptly to
requests.
New European AML Authority Protective Measures and Whistleblower
Safeguards
The financial landscape of Europe is on the brink
of a pivotal transformation with the impending Integral to the new framework are the
launch of the Anti-Money Laundering Authority provisions for establishing secure channels for
(AMLA) in 2024. This new regulatory body is set reporting violations and safeguarding
to fortify the anti-money laundering (AML) and whistleblowers, solidifying the EU's
counter-terrorist financing (CFT) framework commitment to transparency and
across the European Union, marking a crucial accountability.
evolution in the bloc's approach to financial
oversight. Location and Logistics

The Genesis of AMLA The decision regarding AMLA's headquarters

remains in deliberation, with multiple European
AMLA emerges as a centralized authority with cities vying to host the authority. This
the mandate to oversee the most high-risk decision-making process is now inclusive of the
financial institutions operating across multiple European Parliament, aligning with a Court of
EU states, including one from each member Justice ruling, and is expected to be a focus of
country. Its remit extends to entities active in at negotiation through 2024.
least six EU countries and will encompass crypto
asset service providers, reflecting the expanding Implications for Financial Entities
purview of financial regulation in the digital age.
As AMLA gears up to become operational, banks
Harmonizing AML/CFT Standards and financial institutions across Europe are
poised to encounter more rigorous AML
With AMLA at the helm, the EU anticipates a regulatory standards and heightened
more harmonized set of AML/CFT regulations. supervision. To navigate this new regime,
This harmonization is expected to ensure a entities are advised to undertake
uniform application of rules and enhance the comprehensive reviews of their current policies,
effectiveness of combating illicit financial flows aligning them with the impending requirements
within the member states. and establishing robust AML governance
frameworks that span their entire EU
Operational Dynamics operations.
AMLA will not only directly supervise entities The establishment of AMLA signals a new era of
but also mediate and resolve supervisory financial regulation in Europe—one
disputes between national authorities. It will characterized by strategic oversight, unified
support and coordinate actions across EU regulatory standards, and reinforced measures
countries, ensuring a convergence of against money laundering and terrorism
supervisory practices. Furthermore, AMLA will financing. As AMLA's implementation unfolds,
assist financial intelligence units in dissecting financial institutions must ready themselves for
suspicious transactions and managing FIU.net, a a landscape that demands greater vigilance,
critical platform for sharing financial collaboration, and adaptation to the evolving
intelligence. regulatory demands of the European Union.
AI, ML and data management for AML Predictive Analysis
transaction screening
ML models are capable of predictive analysis,
The fight against money laundering is a moving which can forecast potential AML risks before
target, with financial institutions constantly they materialize. This preemptive approach
allows financial institutions to proactively adjust
seeking new technologies to stay ahead. The their compliance strategies and safeguard
integration of Artificial Intelligence (AI) and against potential threats.
Machine Learning (ML) into Anti-Money
Laundering (AML) transaction screening Regulatory Compliance
represents a significant leap forward in this
ongoing battle. Let's delve into how AI and ML As regulatory environments evolve, AI and ML
are revolutionizing data management and AML systems can help banks stay compliant by
continuously updating screening parameters
transaction screening. and compliance models to reflect the latest
regulatory requirements. This adaptability is
The AI and ML Revolution in AML crucial in a landscape where non-compliance
can result in hefty penalties.
AI and ML technologies are transforming AML
transaction screening by bringing in Conclusion
unparalleled efficiency and accuracy. These
intelligent systems can analyze vast datasets AI and ML are not just futuristic concepts but
rapidly, identifying patterns and anomalies that present-day necessities in the realm of AML
could suggest illicit activities. By learning from transaction screening. Financial institutions that
leverage these technologies can expect to see a
historical data, they can adapt and respond to marked improvement in their AML processes,
emerging money laundering methods. from data management to real-time transaction
analysis. As money laundering tactics grow
Data Management Advancements more sophisticated, AI and ML provide the tools
necessary to combat them effectively, ensuring
Effective AML strategies hinge on the quality of the integrity of the financial system and
data management. AI-powered systems excel in maintaining public trust.
sorting, organizing, and maintaining large
volumes of transactional data. They ensure that Note to Financial Institutions
data is clean, structured, and readily accessible
While AI and ML offer remarkable benefits, it's
for analysis. Moreover, these systems can essential to approach their integration
integrate data from disparate sources, providing thoughtfully, considering the ethical
a holistic view of customer activities. implications and the importance of human
oversight. As AI and ML continue to evolve,
Reducing False Positives institutions must ensure these technologies are
used responsibly and in a way that
A persistent challenge in AML transaction complements the expertise of their human
screening is the high rate of false positives, counterparts.
which can lead to operational inefficiencies. ML
algorithms are particularly adept at For financial institutions looking to embrace
these advancements, it's a journey of
distinguishing between legitimate and continuous learning, investment in technology,
suspicious transactions over time, thereby and adaptation to regulatory expectations. The
reducing the number of false alerts and future of AML transaction screening is bright,
allowing compliance officers to focus on with AI and ML at its core.
genuine risks.
Integrating Diversity, Equity, and Inclusion into Performance Management: Performance
HR Talent Management evaluations are structured to be objective,
focusing on results and competencies, thus
In the modern workplace, talent management minimizing the influence of unconscious biases.
cannot be discussed without addressing
Diversity, Equity, and Inclusion (DEI). These Retention Strategies: DEI-focused retention
three pillars have become central to cultivating strategies include creating employee resource
a workplace environment that not only respects groups, facilitating open dialogues on DEI topics,
but also celebrates the varied backgrounds and and ensuring that all voices are heard and
perspectives of its employees. Here’s how DEI valued.
principles are reshaping HR talent management
strategies. The Business Case for DEI in Talent
Management
The DEI Imperative
Incorporating DEI is not just the right thing to do
Diversity in the workplace encompasses a range from a societal perspective—it's also good
of human differences, including but not limited business sense. Diverse teams are known to be
to race, gender, ethnicity, age, sexual more innovative and better at problem-solving.
orientation, religion, and disability. Equity An equitable and inclusive workplace attracts
ensures fair treatment, access, opportunity, and talent, fosters loyalty, and enhances employee
advancement for all individuals. Inclusion refers engagement, all of which contribute to the
to a culture where all employees feel bottom line.
welcomed, respected, and valued for who they
are. Together, these elements form the Measuring DEI Success
cornerstone of a progressive talent
management strategy. To assess the effectiveness of DEI initiatives,
organizations are developing metrics and KPIs
HR Talent Management Strategies with DEI related to workforce diversity, equity in
promotion rates, and the inclusivity of the
Recruitment: Talent acquisition strategies now workplace environment. Regular surveys and
emphasize diversity, seeking candidates from feedback mechanisms help in monitoring the
various demographics, backgrounds, and organization's DEI climate.
experiences. This broadens the talent pool and
brings a wealth of perspectives to the DEI is a journey, not a destination. It requires
organization. ongoing commitment, a willingness to learn and
adapt, and continuous dialogue. HR
Onboarding: Onboarding processes are departments at the forefront of this evolution
designed to be inclusive, with sensitivity training recognize that managing talent effectively
and mentorship programs that support a means embracing DEI at every stage of the
diverse workforce. employee lifecycle. By weaving DEI into the very
fabric of talent management, organizations can
Professional Development: Development and not only enrich their work culture but also
promotion opportunities are offered equitably, enhance their competitive edge in an
with programs in place to identify and eliminate increasingly diverse global marketplace.
potential biases that could hinder the progress
of underrepresented groups.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

Compliance officer Leadership Program

2023-2024
91 slides
US UK & EU BFSI
199U$D

This seminar is ideal for professionals in

the banking, investment, and corporate
sectors, sustainability consultants, and
regulatory compliance experts.

Compliance officer Leadership Program Strategic Advancement and Support

2023-2024
Compliance Vision prepares you for the next
The Compliance Officer Leadership Program step with a structured 12-step plan, timeline
2023-2024 by Compliance Vision is a preparation for leadership, auto-evaluation
forward-thinking initiative designed to elevate guides, and tips to secure a leadership position.
compliance professionals in the banking and This systematic approach ensures that you are
financial services sector to leadership roles. This not only an expert in your field but also
article will explore the program's offerings and strategically planning for your future in the
its potential benefits for compliance officers organization.
aiming to climb the corporate ladder.
For compliance officers who are serious about
Empowering Compliance Officers for advancing their careers, the Compliance Officer
Leadership Roles Leadership Program 2023-2024 offers a robust
foundation and the tools necessary for success.
Compliance Vision's program is curated by It’s an opportunity to learn from the best and
regulatory and compliance experts, including become the driving force in a changing
ex-supervisors from regulatory bodies, to share regulatory environment. For more information
high-value content that will help compliance and to purchase the program, visit Compliance
officers become pivotal in ensuring their Vision's website: compliancevision.com
organizations meet international standards and
local requirements. It is an invaluable resource This seminar would be ideal for banking
for compliance professionals looking to boost professionals, compliance officers, and risk
their visibility within their organizations with managers seeking to update their knowledge
cost-friendly solutions. and skills in line with current regulatory
standards.
Course Content and Benefits
The program focuses on Sustainable Finance,
Digital Governance, and Anti-Money
Laundering, which are crucial areas for today's
compliance officers. Beyond mere expertise in
regulations, the program emphasizes analytical
and legal skills and leadership development –
qualities that are essential for those aspiring to
become team leaders.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

Chief Compliance officer Leadership Program

2023-2024
174 slides
171 pages Word
US UK & EU BFSI
490 U$D

This seminar is ideal for professionals in

the banking, investment, and corporate
sectors, sustainability consultants, and
regulatory compliance experts.

Chief Compliance officer Leadership Program Key insights

2023-2024
Our Regulatory and Compliance Experts will also
The 2023-2024 Chief Compliance Officer help you focus on the most important part of
Leadership Program, crafted by premier your position, which is leading the Compliance
compliance professionals from the Banking and Program. At Compliance Vision, we will assist
Financial Services Industry, offers a distinctive you in developing your soft skills on your own.
viewpoint on the role of a Chief Compliance That’s why it’s important to understand what
Officer. kind of CCO you are, and what you really know
about your own set of skills, using the following:
Empowering Compliance Officers for
Leadership Roles ✓ Key trends and challenges
These Chief Compliance officers are navigating a ✓ Models of Chief Compliance Officer
myriad of challenges, including increasingly
intricate regulatory frameworks across various ✓ Know your skills
regions, effective team management, and the
need to fortify organizational resilience in the ✓ Use your skills
post-Covid-19 era, all while striving to become
✓ Mitigate top risks
influential leaders within their organizations.
Though primarily tailored for the BFSI sector, ✓ Strategic planning
the program also provides valuable insights for
FinTech companies and other enterprises, like ✓ Take action
legal and consulting firms. Participants will gain
access to the expertise of world-renowned This seminar would be ideal for banking
Compliance and Regulatory Experts, enhancing professionals, Chief compliance officers, and
their professional profile within their companies risk managers seeking to update their
through a cost-effective approach. knowledge and skills in line with current
regulatory standards.
Step-up to the next level
The CCO Leadership Program will help you gain
key organizational insights on your position. As
the leader of your department, you will gain key
managerial recommendations from our Experts
to help you deliver an efficient and resilient
Compliance Program for your top-management
based on the following:
✓ 100 days roadmap
✓ Comprehensive audit processes
✓ Master internal policies and processes
✓ Review Compliance trainings
✓ Set managerial goals
✓ Key regulatory requirements
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

Chief Sustainability Officer Leadership

Program 2023-2024
173 slides PPT
157 pages Word
US UK & EU BFSI
499U$D

This seminar is ideal for professionals in

the banking, investment, and corporate
sectors, sustainability consultants, and
regulatory compliance experts.

Chief Sustainability Officer Leadership Program This program begins with an identification and
2023-2024 understanding of the key trends and challenges
in the field of sustainability, providing
This training seminar is designed to empower participants with a current and forward-looking
Chief Sustainability Officers (CSOs) to become perspective. It explores various models of Chief
advocates for sustainability, equity, and Sustainability Officers, elucidating the diverse
inclusion both within their organizations and roles and responsibilities they can undertake
externally. The seminar addresses the evolving within different organizational contexts. A
role of CSOs from a "good to have" to a significant focus is placed on self-assessment,
"must-have" in the corporate world, encouraging CSOs to critically evaluate their
emphasizing their critical role in shaping a own skills and competencies to identify areas
company's social and environmental impact. for growth. The then guides participants in
effectively applying these skills within their
The Essential Role of the CSO organizations, ensuring that their leadership
translates into tangible actions and results.
This Leadership Program delves into the critical
Participants will also learn to develop a
impact of climate change on organizations,
comprehensive sustainability strategy,
underscoring the necessity for CSOs to lead in
encompassing aspects like defining corporate
this challenging landscape. This module offers a
purpose, optimizing supply chains, and building
comprehensive exploration of key sustainability
strong stakeholder partnerships. A unique
concepts such as Environmental, Social, and
aspect of this program is its emphasis on
Governance (ESG) criteria, Diversity, Equity, and
fostering innovative intrapreneurship and the
Inclusion (DEI), the circular economy, the LOCAL
adoption of new business models, preparing
model, Net Zero commitments, and aligning
CSOs to lead with creativity and adaptability in
with stakeholder expectations. Participants will
the pursuit of sustainability objectives.
engage in an in-depth analysis of internal
policies and processes crucial for driving Building resilient governance structures
sustainability within their organizations. By
examining a company case study, the program This segment of the training focuses on
provides practical insights into best practices in empowering CSOs with insights from Chief
sustainability management, offering a Compliance Officers to establish effective
real-world context. Additionally, it emphasizes governance structures. It emphasizes the
the importance of setting strategic managerial importance of CSOs becoming vocal advocates
goals that are in harmony with sustainability of sustainability, not just within their
objectives. A crucial component of this module organizations but also in the wider community,
is the understanding of key regulatory advocating for sustainable practices and
requirements relevant to sustainability in policies.
different regions, particularly in the United
States, European Union, and the United Target Audience
Kingdom. This knowledge is vital for CSOs to
effectively navigate the complex regulatory This seminar is ideal for current and aspiring
landscape and lead their organizations towards Chief Sustainability Officers, senior
a sustainable and compliant future. management, and professionals involved in
corporate sustainability and compliance.
Leadership skills and development for CSOs
Goals
This program is designed to equip Chief
Sustainability Officers with the necessary Participants will gain insights into the evolving
leadership skills and knowledge to navigate the role of the CSO, develop leadership skills, and
evolving landscape of sustainability. learn strategies for implementing effective
sustainability initiatives in their organizations.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

EU Banking Package
9 courses – 27 videos
US UK & EU BFSI
1,850 U$D

This seminar would be ideal for banking

professionals, compliance officers, and
risk managers seeking to update their
knowledge and skills in line with current
regulatory standards.

Seminar content Basel III in Europe for banking professionals

1. Introduction to Basel 3: This module covers Basel III was developed in response to the
the Basel 3 regulations, focusing on their deficiencies in financial regulation revealed by
development, core components, and the impact the financial crisis of 2007-2008.
on capital adequacy, stress testing, and market
liquidity risk. The framework aims to strengthen bank capital
requirements by increasing bank liquidity and
2. Banking Activities: An overview of key decreasing bank leverage.
banking functions, including lending,
investment, and deposit services, emphasizing Basel III measures include a more stringent
regulatory compliance and risk management in definition of capital, higher requirements for the
each area. quality and quantity of capital, improved risk
coverage, the introduction of a leverage ratio as
3. Governance of Banking Supervision: This a backstop to the risk-based requirement, and
module explores the regulatory frameworks and new liquidity ratios.
supervisory practices in the US, UK, and EU,
highlighting differences and similarities in CRD and CRR Package
overseeing financial services.
The CRD and CRR package is the EU's legislative
4. Internal Control: Examines strategies and response to implement Basel III standards. It
frameworks for establishing robust internal comprises the CRD, which must be transposed
controls in banks, focusing on risk management, into national law by member states, and the
regulatory compliance, and operational CRR, which is directly applicable across the EU.
efficiency.
The CRD IV package, adopted in 2013,
5. IFRS Methodology: An in-depth look at the introduced several key reforms, including
International Financial Reporting Standards, stronger prudential requirements for banks,
focusing on their application in the banking improved risk management, and increased
sector, including financial reporting and transparency in the banking sector.
disclosure requirements.
The CRR II and CRD V, adopted in 2019, further
6. Operational Risk: Identifies and analyzes the enhanced the framework, focusing on areas
sources of operational risk in banking, such as the leverage ratio, the net stable
discussing methods for assessment, mitigation, funding ratio, and the total loss-absorbing
and management. capacity requirement.

7. Credit Risk: Focuses on understanding, Impact on European Banks

measuring, and managing credit risk, including
techniques for assessing borrower Banks in the EU are required to maintain proper
creditworthiness and strategies for risk leverage ratios and high-quality liquid assets to
mitigation. ensure a more resilient banking sector. The
regulations also demand enhanced disclosures
8. Liquidity Risk: Covers the importance of on capital and liquidity, improving transparency
liquidity risk management in banks, exploring and allowing regulators and stakeholders to
tools and techniques for maintaining adequate better assess banks' risk profiles. European
liquidity under various market conditions. banks have been adjusting their capital and
liquidity strategies to comply with these
9. AML for Supervision: Detailed overview of requirements, which may impact their
Anti-Money Laundering (AML) principles, profitability and business models.
regulatory requirements, and effective
supervision practices in the banking industry.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

Solvency 2
6 courses
US UK & EU BFSI
1,350 U$D

This seminar aims to provide an in-depth

understanding of the Solvency II framework,
focusing on its core pillars, governance, capital
requirements, and risk management aspects.
It is designed for professionals in the insurance
sector, regulatory bodies, and financial
analysts.

Module Breakdown: Solvency 2 for EU Insurance companies

1. The 3 Pillars of Solvency II: Solvency II is a regulatory framework for
insurance companies in the European Union
• An overview of the three pillars: that was implemented on January 1, 2016. It
Quantitative requirements, Governance and was designed to harmonize EU insurance
Supervision, and Disclosure and regulation, primarily concerning the amount of
Transparency. capital that EU insurance companies must hold
to reduce the risk of insolvency. Here's a
• Discussion on how these pillars interact and summary of its key aspects:
support the overall objective of Solvency II.
Three-Pillar Structure:
2. Solvency II Main Features:
Pillar 1: Sets out quantitative requirements,
• Key components of the Solvency II Directive. including how insurance companies should
value their assets and liabilities and calculate
• The scope and impact of Solvency II on the
their capital requirements. The Solvency Capital
insurance industry.
Requirement (SCR) ensures firms hold enough
3. Governance of Solvency II: capital to survive significant losses, and the
Minimum Capital Requirement (MCR) is the
• Examination of the governance minimum level below which policyholders and
requirements under Solvency II. beneficiaries would be exposed to an
unacceptable level of risk.
• Roles and responsibilities of the
management and key function holders. Pillar 2: Focuses on governance and risk
management. It requires firms to assess their
4. Solvency II Capital Requirements: own risks through the Own Risk and Solvency
Assessment (ORSA) and ensures they have
• Understanding the Minimum Capital adequate governance and internal control
Requirement (MCR) and Solvency Capital mechanisms.
Requirement (SCR).
Pillar 3: Involves disclosure and transparency
• Approaches to calculate SCR: Standard requirements, ensuring a high level of
Formula vs. Internal Models. transparency and comparability. Firms are
required to regularly publish a Solvency and
5. Solvency II Market Risk: Financial Condition Report (SFCR).
• Analysis of market risk under Solvency II. Risk-Sensitive Framework:
• Techniques and tools for managing market Solvency II is more risk-sensitive than its
risk. predecessor. It takes into account the entire
balance sheet and requires insurance
6. Solvency II Counterparty Risk: companies to manage a range of risks, including
• Identifying and measuring counterparty risk. underwriting, market, credit, and operational
risks.
• Strategies for mitigation and management
of counterparty risk. Harmonization Across EU:
The directive aims to facilitate the development
of a single EU insurance market, promoting
competition and improving consumer
protection.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

EU AML/CFT package 2023-2024

6 courses
US UK & EU BFSI
1,100 U$D

This seminar is ideal for AML/CFT compliance

officers, financial regulators, banking
professionals, legal advisors, and auditors.

Seminar content EU AML regulatory framework

1. Introduction to the EU AML/CFT Regulatory The New Anti-Money Laundering Authority
Framework: (AMLA)
• Overview of the EU AML/CFT regulations. One of the most significant developments in
European AML efforts is the creation of the
• Historical context and evolution of the Anti-Money Laundering Authority (AMLA). Set
framework. to be operational in the near future, AMLA is
expected to play a pivotal role in harmonizing
2. The New Anti-Money Laundering Authority AML practices across the EU. It will serve as a
(AMLA): central entity to supervise high-risk financial
entities and coordinate national authorities,
• Role and functions of AMLA.
ensuring a more unified approach to combating
• Impact on AML/CFT practices in the EU. money laundering.

3. The Single EU Rule Book for AML/CFT: The Single EU Rule Book for AML/CFT

• Comprehensive review of the Single Rule The introduction of a Single EU Rule Book for
Book. AML and Counter-Terrorist Financing (CFT)
marks a move towards standardization of
• Harmonization of AML/CFT rules across the AML/CFT measures across member states. This
EU. approach aims to eliminate the disparities in
AML/CFT regulations across different
4. The New EU AML/CFT Framework for the jurisdictions, providing a clear and consistent
Transfer of Funds and Virtual Services framework for financial institutions to follow.
Providers (VSPs):
Regulating Virtual Service Providers and Fund
• Regulations governing fund transfers and Transfers
VSPs.
The EU has also updated its AML/CFT
• Compliance requirements for financial framework to address the challenges posed by
institutions. the digital transformation of financial services.
New regulations encompass the transfer of
5. EU AML/CFT Requirements Regarding Cash funds and Virtual Service Providers (VSPs),
Transactions: bringing these entities under stricter regulatory
scrutiny. This move underscores the EU's
• Understanding the rules and limitations on commitment to keeping pace with technological
cash transactions. advancements and closing potential loopholes
in digital finance.
• Best practices for compliance.
Cash Transaction Regulations
6. EU AML/CFT Correspondent Banking
Requirements Update: In an effort to curb money laundering through
cash transactions, the EU has implemented
• Latest updates and requirements for stringent controls and reporting requirements
correspondent banking. on large cash transactions. These measures are
• Navigating cross-border banking challenges. designed to enhance the traceability of cash
flows and deter illicit activities.
 What does it mean for your organization ?
Not complying with Russian sanctions
Global economy and financial instability
would result in a dramatic loss of
business and reputation. BFSI
You need to lay out a comprehensive
plan and strategy in order to assess
and identify activities that are
Transnational and complex
organizations need both a centralized
plan and local understanding of
organizations must comply with potentially affected by US , UK and EU specific regulations that could
sanctionsfew sanctions eventually result in enforcement
actions from regional supervisors

How can we help your business ? Compliance Academy 2023-2024

European Sustainable Finance framework

6 courses
US UK & EU BFSI
1,250 U$D

This seminar is ideal for professionals in the

banking, investment, and corporate sectors,
sustainability consultants, and regulatory
compliance experts.

Module Breakdown: Navigating the Path to Sustainability: The EU's

Sustainable Finance and ESG Agenda
1. Corporate Disclosure of Climate-Related
Information: In an era where climate change and
environmental sustainability are pressing global
• Understanding the EU’s regulatory issues, the European Union (EU) has taken
framework for climate-related disclosures. significant steps in integrating sustainability into
its financial system. This article delves into the
• Best practices for effective and transparent EU's approach to sustainable finance and
climate-related reporting by corporations. Environmental, Social, and Governance (ESG)
criteria, highlighting how these initiatives are
2. EU Taxonomy of Sustainable Activities:
shaping the future of finance in Europe.
• A comprehensive guide to the EU Taxonomy
The EU's Sustainable Finance Framework
and its classification system for sustainable
activities. The EU’s sustainable finance framework is a
cornerstone of its action plan to finance
• How the taxonomy affects investment and
sustainable growth. This framework aims to
financing decisions.
reorient capital flows towards sustainable
3. EU Green Bonds Standards Issues: investment, manage financial risks stemming
from climate change, and foster transparency
• Overview of the EU Green Bond Standard. and long-termism in financial activities.

• The process of issuing green bonds and the Key Components of the EU Sustainable Finance
benefits for issuers and investors. Strategy

4. Sustainable Finance: A Transition to a EU Taxonomy for Sustainable Activities: The

Climate Neutral Economy: taxonomy is a classification system, establishing
a list of environmentally sustainable economic
• Exploring the role of finance in achieving activities. It provides clarity on which activities
climate neutrality. can be considered sustainable, guiding
investment decisions.
• Strategies for transitioning to sustainable
finance models. EU Green Bond Standard: This voluntary
standard sets criteria on how green bonds
5. Green Reporting and Performance should be issued. It ensures that funds raised
Management: are allocated to projects that meet stringent
environmental criteria and contribute to
• Techniques for green reporting and sustainability objectives.
integrating sustainability into performance
management systems. Sustainable Finance Disclosure Regulation
(SFDR): SFDR requires financial market
• Tools for measuring and managing participants to disclose how they integrate ESG
environmental impact in financial factors into their investment decisions and
operations. advisory processes. This enhances transparency
and helps investors make more informed
6. ESG Climate Change Criteria and Credit Risk decisions.
Scoring:
• Understanding the incorporation of ESG
climate change criteria in credit risk
analysis.
• Methods for assessing and scoring credit
risk based on ESG factors.
Disclaimer: This is for general information only. The information presented does not constitute legal advice. Compliance Vision accepts
no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action
taken based on this information. For details on the source materials used in this guide, please visit compliancevision.com

compliancevision.com