Episode 154

21st April– 27th April 2025

Sanctions

YIB responds to US sanctions

The Yemen International Bank (‘YIB’) has responded to the sanctions imposed on it by the US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’). In its statement, YIB emphasised that it has operated for over 45 years with professionalism and adherence to international banking standards. The bank maintains strict compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations, as well as guidelines set by the Central Bank of Yemen.

Despite the sanctions, YIB reassures customers that their deposits are secure, citing assets and reserves that exceed liabilities. The bank asserts its commitment to legal steps to lift the sanctions. Additionally, it calls on all stakeholders to protect the banking sector from political conflicts, emphasising the severe consequences such disputes have on Yemen’s national economy and citizens' livelihoods.

US sanctions Iranian LPG facilitators

In new sanctions from the US, OFAC has sanctioned Iranian national Seyed Asadoollah Emamjomeh and his corporate network for facilitating the export of hundreds of millions of dollars' worth of Iranian liquefied petroleum gas (LPG) and crude oil to foreign markets. The proceeds from these transactions allegedly fund Iran's nuclear program and regional proxy groups, including Hizballah, the Houthis, and Hamas.

The sanctions, issued under Executive Order 13902, target Emamjomeh, his son Meisam, and various Iran- and UAE-based entities involved in LPG trade. The network includes companies such as Caspian Petrochemical FZE and Pearl Petrochemical FZE, as well as the vessel TINOS I, which attempted to transport LPG from the US to China in 2024.

As a result, all assets of designated individuals and entities within the US or controlled by US persons are blocked, and American entities are prohibited from engaging in transactions with them. The Treasury emphasised that sanctions aim to disrupt illicit revenue flows and encourage compliance with international regulations.

UK amends FAQs

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has added three questions (Qs146, 147, and 148) to its FAQs page. The questions address issues around the use of licenses which mention the banks of Rosbank PJSC and Bank Otkritie following mergers.

UK Syrian sanctions changes

The UK has amended its sanctions on Syria to support the country’s reconstruction following the fall of Assad. These changes include lifting sanctions on 12 entities, including the Syrian Ministries of Defence and Interior, as well as media companies. Restrictions on sectors like financial services and energy production are also being removed to encourage investments in Syria’s energy infrastructure and economy. However, sanctions remain in place against members of the former regime and those involved in illegal activities like captagon trade.

The UK’s amendments aim to hold Assad and his associates accountable for human rights violations while supporting a political transition, regional stability, and national security. Additionally, the UK has pledged £160m in humanitarian aid to assist Syria’s recovery. The Notice is here, and the Syria sanctions guidance has been updated and the Regulations published. By contrast, those involved with the former regime of Assad remain subject to sanctions. That Notice is here.

Licence extended

The Office of Financial Sanctions Implementation (‘OFSI’) under the Russia (Sanctions) (EU Exit) Regulations 2019 has extended an existing licence which permits certain payments and activities related to insolvency proceedings involving GTLK Europe, GTLK Capital, and their subsidiaries. The licence outlines that these permissions are strictly limited to actions necessary for insolvency proceedings, provided such actions do not directly or indirectly benefit individuals designated under the Russia Regulations. The licence also includes clear notification and record-keeping requirements. Entities intending to use the licence must notify HM Treasury within 14 days of making the first payment and are required to provide relevant contact details. Furthermore, accurate records of all activities conducted under the licence must be maintained for at least six years, ensuring transparency and compliance. The licence took effect on 1st August 2023, and is valid until 31st July 2030, unless it is varied, revoked, or suspended by HM Treasury. Additionally, the document lists the subsidiaries of GTLK Europe and GTLK Capital, which span multiple jurisdictions, including Ireland, Bermuda, Malta, and the UAE, illustrating the broad reach of the affected entities.

New trade measures announced

The UK government has announced new trade sanctions against Russia, namely ‘export bans on products including chemicals, electronics, machinery, plastics, and metals, further restricting Russian access to UK goods. This aligns UK sanctions with international partners, including the European Union. Additionally, the UK has introduced prohibitions on the transfer, making available and ancillary services related to certain technology, sanctioning information flows associated with energy-related, advanced and industrial manufactured goods. Sectoral software and technology prohibitions have also been introduced, preventing the transfer and making available of business enterprise, industrial design, and oil and gas related software and technology (as listed in the legislation), as well as the provision of ancillary services related to this software and technology…. Import bans now cover synthetic diamonds processed in third countries and helium.’ The government has published Statutory Guidance, a Notice to Exporters, Technology Transfer Guidance, and Sectoral Software Guidance following this announcement.

Russia sanctions UK politicians

Russia has imposed sanctions on 15 UK MPs and six members of the House of Lords, banning them from entering the country. Moscow claims the politicians made “hostile statements and unfounded accusations” against Russia, accusing the UK of demonising Russia amid the war in Ukraine. The sanctions target MPs across different political parties, many of whom have advocated for using frozen Russian assets to support Ukraine’s war effort. This latest round of sanctions follows Russia’s previous moves against UK politicians, including sanctions on 287 MPs in 2022 after Britain acted against Russian officials over its invasion of Ukraine.

Money Laundering

ABA responds to FATF Consultation

The American Bankers Association (‘ABA’) has published its response to Financial Action Task Force's (‘FATF’) proposed revisions to Recommendation 16 (R.16). The ABA supports FATF’s reconsideration of R.16 in light of evolving payment technologies and emerging financial crime methods, such as the use of convertible virtual currencies. They appreciate FATF incorporating many of their previous suggestions, including:

-          Acknowledging that risks vary by payment type and should be addressed accordingly.

-          Preserving R.16 exemptions for card payments used in purchasing goods and services.

-          Removing the requirement to verify information alignment after payment initiation.

-          Eliminating the mandatory inclusion of full addresses in all payments.

-          Defining the payment chain through instruction routing.

However, the ABA urges further revisions to ensure the Standards remain technology-neutral while improving security, efficiency, and accessibility in cross-border payments. The ABA highlights concern about FATF’s proposals on information alignment, privacy, and cross-border cash withdrawals, emphasising that beneficiary information alignment is not an effective measure against fraud, as bad actors often manipulate information more meticulously than legitimate users.

IIF responds to FATF Consultation

The Institute of International Finance (‘IIF’) has also submitted its response to the Financial Action Task Force's (‘FATF’) Second Public Consultation on Recommendation 16, which focuses on payment transparency. The IIF acknowledges improvements made since the first consultation but highlights three key concerns:

-          Higher-than-expected implementation costs

-          Excessive data flow requirements conflicting with data minimisation principles

-          Inconsistent implementation across jurisdictions leading to technical fragmentation

The IIF's recommendations include harmonising transaction thresholds, recognising multiple payment standards (ISO 20022 & ISO 8583), extending exemptions beyond card payments, modifying cross-border cash withdrawal rules, and maintaining flexibility in the 2030 implementation timeline.

Overall, the IIF supports FATF's objective of securing global payment systems while making cross-border transactions faster, cheaper, and more transparent. It emphasises continued stakeholder dialogue to refine proportionality and minimise unintended consequences.

Kuwait tackles charity funding

Kuwait has suspended all charitable fundraising activities to strengthen regulatory oversight and prevent misuse of funds. The Ministry of Social Affairs uncovered unauthorised donation campaigns operating through unofficial websites and accounts, prompting the immediate halt of fundraising efforts across all licensed charitable associations and philanthropic organisations. The suspension will remain in place until new procedures are fully implemented to protect donor funds, prevent duplication, and improve transparency. Organisations found violating these rules face penalties ranging from account suspension to a complete operational shutdown.

As part of these regulatory changes, Kuwait has introduced stricter measures for charitable organisations. Any fundraising promotions must now receive prior written approval, and the use of social media, digital billboards, shopping malls, and cooperative societies for advertising donations has been restricted. Charities must notify the ministry at least two weeks in advance before organising any events, campaigns, or agreements with foreign institutions, ensuring better oversight and coordination. Additionally, representatives traveling abroad must register through the “Safe Traveler” system.

To modernise the charitable sector, Kuwait has launched a new digital platform integrated with the Mobile ID system. This initiative aims to centralise aid applications, improve coordination, and ensure fair distribution of resources while protecting donor funds from potential mismanagement. The platform provides preliminary beneficiary data while safeguarding personal information. However, it remains unclear whether charities have fully adopted the system.

Since November 2024, the Ministry of Social Affairs has dissolved at least 30 inactive charities after inspections revealed that some organisations had not engaged in charitable work for years. These measures seek to eliminate ineffective organisations and ensure resources are used efficiently. Additionally, Kuwait’s reforms align with international standards, particularly with the Financial Action Task Force (FATF) guidelines on anti-money laundering. A recent FATF report acknowledged Kuwait’s legal framework for combating illicit finance but highlighted enforcement challenges. Governments which fail to meet FATF standards risk being placed on a greylist or blacklist, potentially affecting their global financial relations. To address these concerns, Kuwaiti authorities are tightening control over cross-border donations and enhancing coordination among ministries to strengthen financial oversight.

These reforms signal Kuwait’s broader push to modernise its charitable sector while reinforcing transparency and compliance with international financial regulations.

Link between art and money laundering

Now to a blog post which explores how criminals use art, artifacts, and cultural assets to launder money in Latin America. It highlights cases where high-value artworks, including pieces by Rubens, Miró, and Dalí, were seized from corrupt politicians and criminal networks. The appeal of cultural assets for money laundering lies in their subjective valuation, portability, and ability to conceal illicit funds. The article identifies two main laundering methods: direct involvement in illicit trade (such as stolen artifacts) and laundering through seemingly legitimate transactions (like purchasing art with dirty money). Corruption plays a significant role, as criminals often bribe officials to facilitate smuggling or evade scrutiny. Experts have stressed the need for better coordination between financial regulators and cultural heritage agencies, along with improved registries to track ownership and transactions. Stronger institutional capacity and private sector engagement are also seen as key to curbing these laundering schemes.

New AML guidance for the legal sector

And finally on money laundering news this week, the Law Society has confirmed that HM Treasury has approved the Legal Sector Affinity Group’s updated anti-money laundering guidance for the legal sector 2025.

Fraud

New fraud report by PYMENTS

A recent report by PYMNTS Intelligence and Intellicheck highlights the growing threat of identity fraud in the financial sector, particularly for FinTechs. The report finds that 42 per cent of all suspicious banking activity is linked to identity-related fraud, with verification circumvention being the most common type, and that online and mobile banking channels account for 75 per cent of reported fraud attempts, emphasising the vulnerabilities in digital-first financial platforms. Finally, that 93 per cent of FinTechs struggle with regulatory compliance, balancing fraud prevention with evolving industry standards. The report also identifies that fraudsters are increasingly leveraging AI-powered identity manipulation and dark web resources, making detection more challenging. In response, financial institutions are investing in fraud prevention tools, with 52 per cent planning to adopt AI and machine learning technologies. Other measures include anti-scam education, document verification software, and identity risk solutions. The report stresses the urgent need for FinTechs to strengthen identity verification systems and fraud detection strategies to protect consumers and meet regulatory expectations.

SEC brings crypto and forex fraud charges

In the US, the Securities and Exchange Commission (‘SEC’) has charged Ramil Palafox, the founder of PGI Global, with orchestrating a $198m fraudulent scheme involving crypto assets and foreign exchange trading. The SEC alleges that from 2020 to 2021, PGI Global falsely promised high returns and encouraged multi-level marketing recruitment, while Palafox misappropriated over $57m of investor funds for personal luxury purchases.

The scheme functioned like a Ponzi operation, using incoming funds to pay out promised returns until its collapse in late 2021. The SEC is pursuing permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against Palafox and other affiliated individuals and entities. The US Attorney’s Office has also filed criminal charges, with the FBI and IRS assisting in the investigation.

Bribery and Corruption

China arrests anti-corruption official

China has arrested Li Gang, a former senior anti-corruption official, on suspicion of bribery. Li previously led the discipline inspection team within the Communist Party’s organisation department, which oversees personnel assignments. His arrest is part of a broader crackdown on corruption, following investigations into high-profile figures, including a deputy central bank governor and military officials. President Xi Jinping has identified corruption as the greatest threat to the Party, emphasising its persistence in a January speech.

Transparency International blog on corruption and land governance

A blog post by Transparency International explores how grand corruption in land governance leads to displacement, environmental destruction, and wealth concentration among elites. It highlights how secrecy and weak oversight enable corrupt actors to transfer public land into private hands, often through legal loopholes and institutional gaps.

To counter this, the article advocates for full transparency, not just partial disclosure, using tools like the State of Land Information Index to assess land data accessibility. It stresses the need for interoperable databases, beneficial ownership disclosure, and comprehensive land transaction records to prevent corruption.

Additionally, the piece underscores the importance of inclusive transparency, ensuring that land data is accessible to Indigenous communities, women, and local stakeholders. It calls for strong legal frameworks, independent oversight, and active civil society engagement to enforce accountability.

The article concludes by urging governments and organisations to push for open land data, collaborate with platforms like the Land Portal Foundation, and participate in global discussions, such as the 2025 World Bank Land Conference, to drive meaningful reform.

Former South Korean president indicted

Former South Korean President Moon Jae-in has been indicted on bribery charges. Prosecutors allege that Moon appointed a former lawmaker, Lee Sang-jik, to lead a government-funded agency in exchange for securing a job for his then son-in-law at a Thailand-based airline controlled by Lee. They claim the salary and benefits paid to Moon’s son-in-law constituted a bribe. The charges have been dismissed as politically motivated by his allies.

Market Abuse

German regulator takes action

The German Federal Financial Supervisory Authority (‘BaFin’) has taken significant action against AKBANK AG due to regulatory violations. BaFin imposed administrative fines totalling €432,500 for failures in oversight, including not informing customers about the retention of telephone recordings and lacking systems to detect insider trading and market manipulation. Additionally, BaFin ordered AKBANK AG to address numerous organisational shortcomings, appointed a special commissioner to oversee compliance, and increased the bank's capital requirements.

These measures aim to ensure AKBANK AG operates within proper regulatory frameworks and maintains transparency in its practices. The bank has the option to appeal the fines, but the other orders are final and binding. This case highlights the importance of robust governance and adherence to financial regulations in the banking sector.

Other Financial Crime News

SFO publishes new self-reporting guidance

The Serious Fraud Office (SFO) has announced the introduction of new guidance aimed at encouraging businesses to self-report suspected wrongdoing. For the first time, the SFO has explicitly stated that companies which report misconduct and fully cooperate with investigators can expect to negotiate a Deferred Prosecution Agreement (DPA) rather than face prosecution—unless exceptional circumstances apply.

At a legal conference in London, SFO Director Nick Ephgrave outlined the new corporate cooperation framework. The guidance simplifies the reporting process by providing a direct route to the SFO’s Intelligence Division via a secure portal. It also clarifies what constitutes “genuine cooperation,” including preserving digital and hard copy evidence, presenting facts on suspected criminal conduct, and engaging early with the SFO on internal investigations.

The SFO has also defined behaviours it considers uncooperative, such as “forum shopping,” where companies strategically report offenses to another jurisdiction to avoid scrutiny, and attempts to minimise or obscure individual involvement in wrongdoing. In return for self-reporting, businesses can expect a swift response from the SFO, including an initial contact within 48 business hours, a decision on whether to open an investigation within six months, and a prompt resolution of DPA negotiations.

Ephgrave emphasised the SFO’s commitment to tackling serious fraud, bribery, and corruption, both domestically and internationally. The new guidance is part of broader efforts to optimise the agency’s operations, including incentivising whistleblowers, reforming outdated disclosure practices, trialling innovative technology, and establishing a task force to combat international bribery and corruption.

This marks a significant shift in the SFO’s approach, signalling to businesses that the risks of concealing misconduct are higher than ever. Companies now have a clearer framework for engaging with the SFO and mitigating potential legal consequences through cooperation.

Parliamentary committee hears evidence from agencies on forced labour in UK supply chains

This week, the UK parliament Joint Committee on Human Rights heard evidence from Eleanor Lyons, the Independent Anti-Slavery Commissioner, Phillip Holliday, a Border Force director, and Alex Murray, a National Crime Agency official. The hearing focused on the UK’s legislative and regulatory framework for addressing forced labour; law enforcement measures to uncover wrongdoing in supply chains; and collaboration between agencies and whether a dedicated enforcement body would improve the UK’s response. The session was streamed live on the Committee website, where the recording can now be viewed.

Part Two of the Review of Disclosure and Fraud Offences

And finally, Part Two of Jonathan Fisher KC's Independent Review of Disclosure and Fraud Offences has started, only a short time after the delivery of part one. The review aims to address the evolving nature of fraud, which now constitutes over 40% of recorded offences in England and Wales, with significant harm to individuals and small businesses. Modern technology, including AI-driven scams and deepfakes, has amplified the scale and sophistication of fraud, enabling organised gangs to target thousands of victims rapidly.

The review will focus on challenges across the fraud lifecycle, including detection, disruption, investigation, prosecution, and penalties. It will also consider how law enforcement can better adapt to combat these crimes effectively. The findings will inform the UK government's expanded fraud strategy, emphasising international cooperation and a united global response. This follows Part One of the review, which recommended modernising the disclosure system to free up police resources. The government and legal authorities have expressed dedicated support for the review, highlighting its importance in delivering justice and protecting victims. The terms of reference can be found here.

Cybercrime

Educate young people in cyber risks

In cybercrime news this week, news wires have been discussing the importance of educating young people about cybersecurity risks—particularly ransomware—before they enter the workforce. Matt Cooke, a cybersecurity strategist at Proofpoint, has suggested that while businesses have improved security awareness programmes, early education is crucial in helping new employees recognise cyber threats. Cooke highlights the need for organisations to define what "normal" workplace communications look like so that employees can easily spot suspicious activity. This is a message which I have given consistently to anyone who has listened to this podcast. It is by education that we have the best chance of reducing the cyberthreat to corporations and the public sector.

Finance still drives cybercrime

Mandiant’s annual M-Trends report highlights that financially driven cybercrime, particularly ransomware and extortion, accounts for 55% of global cyber threats in 2024. The sophistication of these attacks is increasing, with infostealer malware and Web3 exploits emerging. Threat actors frequently exploit vulnerabilities (33% of cases globally) and deceptive credential theft (16%) to infiltrate systems. AI advancements are exacerbating risks by enabling more targeted attacks. The average global dwell time for cyber intrusions was 11 days, although longer in EMEA at 27 days. Organisations often learn of breaches externally, rather than through internal detection (57% vs. 43%).

Nation-state actors represent only 8% of tracked threats, with groups like APT44 and APT45 gaining prominence for geopolitical motives. AI continues to present both challenges and opportunities in defending against cybercrime.

UK ban on SIM farms

And finally on cybercrime news this week, the UK government has announced a ban on SIM farms, making it the first country in Europe to prohibit the possession and supply of these devices. SIM farms allow criminals to send mass scam texts and create fraudulent online accounts, increasing the risk of financial fraud.

With fraud accounting for over 40% of reported crime in England and Wales and rising by 19% last year, the government is taking decisive action. The new law will impose unlimited fines in England and Wales and £5,000 fines in Scotland and Northern Ireland for unauthorised possession or supply of SIM farms. The ban will takes effect six months after the Crime and Policing Bill becomes law.

Fraud Minister Lord Hanson emphasised the importance of cracking down on SIM farms, citing that two-thirds of British adults—over 35 million people—have received suspicious messages. Industry leaders, including Vodafone UK and the National Crime Agency, welcomed the ban, highlighting its role in disrupting large-scale fraud operations.

This move is part of the government’s broader Plan for Change, which aims to strengthen fraud prevention and enhance public security. Citizens concerned about fraud can visit Stop! Think Fraud for guidance on staying safe from scams.